The Liquidators of Lehman Brothers Asia Holdings Limited (in Liquidation) ("LBAH") announce their intention to pay a second interim dividend, totalling some USD1.5billion or 12 percent, to creditors of the former funding entity of Lehman's Asia Pacific business.
Patrick Cowley, one of the Liquidators and a Partner of KPMG, said: "This dividend will largely be funded by the recent successful recovery of US$1.2 billion from LBAH's exposure to Japanese non-performing real-estate loans, via another affiliate in Japan used by Lehman to buy up portfolios of NPLS, which were sold after the Lehman bankruptcy, in 2009. LBAH's claim was heavily contested by a Japanese creditor, resulting in litigation that went all the way up to the Japanese Supreme Court. This success is a great result for LBAH's creditors, and represents another significant step forward in this liquidation - we expect to make the payments in 8-10 weeks from now."
The dividend follows the 5 percent first interim dividend earlier this year, and will be paid early next year. The total dividends for LBAH is currently estimated to be between 37.2 percent and 53.5 percent, with total realisations estimated to be between USD4.7 billion and USD 6.1 billion, depending on a number of key factors.
In the three years since the Lehman bankruptcy commenced, the Liquidators of the Lehman Hong Kong entities have realised value from a significant number of assets across the region, including portfolios of Chinese and Thai real estate, Indian proprietary investments and a number of Chinese pre-IPO financings.
Cowley notes: "There has been significant progress made across all fronts. We have now reached landmark settlements with our principal Lehman affiliates in New York and London, which have generated value both in terms of dollar realisations and avoiding costly litigation in relation to USD30 billion of inter-company claims – materially advancing our administrations as a result. Although we still have plenty of work to do, we are making real progress through the asset realisation stage, and with the Plan of Reorganisation recently confirmed by the New York Bankruptcy Court, our focus in 2012 will very much be on returning value to creditors."
The Lehman Brothers bankruptcy is the largest and most complex in history. Before the bankruptcy, Lehman Brothers had over USD630 billion of assets on its balance sheet and operated as a truly global firm with over 7,000 legal entities in more than 40 countries.
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