Lehmans

worldtraveller

Lehman Brothers Holdings Inc emerged from its record $639 billion bankruptcy on Tuesday and said it will start paying back creditors on April 17.

The move puts an end to the bankruptcy proceeding that began on September 15, 2008, when Lehman collapsed and rocked the foundations of the global financial markets, catalyzing the Great Recession.

Exactly 1,268 days later, the case's end enables Lehman to start distributing $65 billion or so to creditors who had asserted more than $300 billion in claims.

Reuters

Some folks clearly did very well out of it. :whistle:

Thrugelmir

worldtraveller wrote: »

Some folks clearly did very well out of it. :whistle:

Barclays who bought the UK investment arm at a knock down price perhaps.

John_Pierpoint

....not to mention the liquidator's fees?

sabretoothtigger

Lawyers fees to top 1.6bn $ apparently. Thats beautiful payday for them but then business should never collapse like that, it usually runs down first

Barclays also took on massive risk while doing a handstand next to a cliff top. Nobody else really bid as I remember, Nomura a japanese investment bank took a chunk also.

Leaving it unsold would have cost more in lost revenue and lost market position so Lehmans argued themselves it was a 'knock down' price but what do you expect in a firesale.
I'd call it earnings based on high risk as did a Judge apparently. Also Barclays (stupidly) wanted to buy Lehmans entirely, they were able to leap in because they had been considering it prior to collapse anyway

John_Pierpoint

There was a play/documentary about this on the telly - where Barclays eventually smelled a rat and the house of cards fell apart over the weekend of 13th September.

What became of the Leman's cash balances? They conveniently made their way from London to New York before the rug was pulled.

Barclays managed to avoid saying "I do" in both Belgium and USA and so survived and got to keep the engagement ring in the first case.

sabretoothtigger

Barclays was blocked by the FSA / treasury I think.
For once big gov was right on that, they lacked collateral much like RBS did a year previous but by 08 it was obvious how it was a house of cards


Lehmans in the USA system is running itself down while paying creditors or suing in this case:

Lehman Suing Intel Over Swap Deal Gone Bad

By Joseph Checkler

Lehman Brothers Holdings Inc. is suing Intel Corp. (INTC) over $1 billion the computer chip maker seized as the result of a sour swap deal. In a Wednesday filing with U.S. Bankruptcy Court in Manhattan, Lehman said the more-than $1 billion in collateral Intel seized a few weeks after the investment bank's 2008 collapse was too much. "This is an action to recover collateral that was unlawfully seized by Intel in breach of a swap agreement between [Lehman's over-the-counter derivatives unit] and Intel," Lehman said.

Intel didn't immediately respond to a request for comment. When Lehman filed for bankruptcy on Sept. 15, 2008, Intel had the right to terminate the swap agreement, which called for Intel to pay Lehman $1 billion in exchange for a number of Intel shares determined by a formula based on Intel's stock price fluctuation. Instead, Intel waited out the market and decided to terminate the agreement on Sept. 29, 2008, which also happened to be the settlement date for the swap. Intel's responsibility at that point was to determine its losses as a result of the termination and seize cash from Lehman based on that determination.

Intel decided to seize the entire $1 billion in collateral and $2 million in interest. "Intel's reasonable losses as a result of terminating the swap agreement were far less than $1 billion," Lehman said in its filing. The investment bank added, "all Intel was entitled to was 50,552,943 shares of Intel stock as the value of the number of shares." In the filing, Lehman said it has demanded the money back but Intel hasn't returned it. Lehman said that if Intel bought those shares on the open market around that time, after a company-imposed "blackout" period, the stock would be worth less than $700 million. In the filing, Lehman said it is suing Intel for breach of contract, violation of the automatic-stay provision of the Bankruptcy Code that protects debtors from litigation, and violation of the turnover provision of the Code that allows companies to recover property. Lehman collapsed in September 2008, becoming a symbol of one of the great financial crises in the country's history.

Its U.S. brokerage business was quickly sold to Barclays PLC (BCS), but the remnants of the rest of Lehman still exist in billions of dollars of assets being overseen by Alvarez & Marsal and the winding down of the brokerage business under the guidance of trustee James W. Giddens.

The company's payback plan became effective in early 2012, and creditors have been paid $47 billion since. Still, the estate continues to pursue claims for creditors like the one against Intel, ensuring Lehman will have regular dates in bankruptcy court for years to come. (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.

Dow Jones Newswires May 02, 2013 13:35 ET (17:35 GMT)

Thrugelmir

sabretoothtigger wrote: »

Barclays was blocked by the FSA / treasury I think.
:

Barclays bought the Investment Banking arm of Lehmans in September 2008.

antrobus

Thrugelmir wrote: »

Barclays bought the Investment Banking arm of Lehmans in September 2008.

And a good deal apparently.

“Pre-crisis Lehman Brothers was a money-machine and in its Barclays reincarnation is profitable again.”

http://www.bloomberg.com/news/2013-04-24/barclays-reaps-benefit-of-diamond-s-purchase-of-lehman-in-u-s-.html

Thrugelmir

antrobus wrote: »

And a good deal apparently.

“Pre-crisis Lehman Brothers was a money-machine and in its Barclays reincarnation is profitable again.”

Recent results show Barclays to be little different to other banks. As the earn out has been and gone.

sabretoothtigger

I missed that particularly. The lehmans deal was so good they got sued for profiteering or something, I sold them at 320 or so.

I dont think they should be half that but they could be, I'd buy again if they do go lower. What are they doing wrong now especially, maybe Lehmans has corrupted them from within but I thought leh fell down from the top