Creditors will be aware that are still a number of outstanding issues that need to be resolved, the outcome of which will impact on any final dividend. These outstanding issues include, but are not limited to, the final level of asset recoveries and claims against the estate, whether the conditions in the US settlement agreements are satisfied, resolving the question as to how any unsecured claims arising from shortfalls in the CMP should be calculated and, in the event that there is a surplus of assets to be paid to unsecured creditors, determining the correct ranking between statutory interest and subordinated debt.
Creditors may be aware that the Joint Administrators of Lehman Brothers International (Europe) (“LBIE”) have issued a joint application with the Joint Administrators of both Lehman Brothers Limited (“LBL”) and LB Holdings Intermediate 2 Limited (“LBHI2”) to ascertain, amongst other things, the relative ranking of interest accruing on the claims of ordinary creditors in the LBIE estate (in accordance with the provisions of rule 2.88 of the Insolvency Rules) and the subordinated debt claims of LBHI2 (their subordinated debt holder), in the event that LBIE’s funds for distribution are sufficient to settle in full unsecured creditors’ claims.
Creditors will be aware that MFG Global Finance Europe Ltd (“Finance Europe”) provided a $250 million subordinated loan to MFG UK. The Joint Special Administrators will be watching the outcome of the LBIE application carefully in order to ascertain whether that judgment has any impact on the ranking of the Finance Europe debt in its estate. A copy of the LBIE application together with witness statement and exhibit is available for download here
If the Joint Special Administrators consider in the future that there is likely to be a surplus in the MFG UK estate and that a court application is required in order to consider the ranking of the Finance Europe debt, then a copy of the application and supporting evidence will be published on this website.