,
Devi Shah 
,
David Allen and
Kristy Zander
Originally published 18 December 2009
Keywords: bar dates, Lehman Brothers, LBIE, trust assets, interim distribution, unsecured creditors
Two key bar dates have now been set in the administration of Lehman Brothers International (Europe) ("LBIE"). The English High Court has made an order setting a bar date of 19 March 2010 for clients of LBIE to make claims in relation to trust assets held by LBIE. The administrators have also, with the leave of the Court, given notice of their intention to make an interim distribution to unsecured creditors, specifying 31 December 2010 as the date by which proofs of debt should be lodged.
Claims to Trust Assets – 19 March 2010
The English High Court has made an order that there be a bar date of 5pm on 19 March 2010, for clients of LBIE who believe that they have claims to 'Trust Assets' to lodge notice of their claims with the administrators.
A copy of the Court's order can be obtained from the administrators' website: http://www.pwc.co.uk/pdf/lehman_order_151209.pdf
'Trust Assets' have a defined definition set out in the order. In broad terms, 'Trust Assets' are securities (and money derived from securities post-administration) held by or to the order of LBIE as custodian in segregated client accounts. 'Trust Assets' do not include money received pre-administration or securities or money held in LBIE's house accounts.
The order does not require creditors to take any action in relation to the following types of claims:
- general, unsecured claims against the estate;
- claims arising only from security interests in Trust Assets; or
- claims to pre-administration monies held by LBIE under the client money rules set out in the FSA's Client Assets sourcebook.
The effect of the order is that claimants must lodge details of their claims to Trust Assets by 19 March 2010, and the administrators will be protected from claims alleging breach of trust if they make distributions of Trust Assets after 19 March 2010 on the basis of the information then available to them. Claimants who do not submit claims to Trust Assets by the bar date may lose or reduce their ability to share in any distributions of relevant Trust Assets.
Claimants in respect of Trust Assets should also be aware of a contractual settlement agreement proposed by LBIE's administrators to facilitate, amongst other things, the distribution of Trust Assets. The settlement agreement is voluntary and is provisionally open for acceptance by eligible claimants until 29 December 2009. The bar date of 19 March 2010 in respect of lodging claims to Trust Assets applies irrespective of whether claimants sign the settlement agreement.
Unsecured Claims – 31 December 2010
The administrators of LBIE have also obtained permission from the English High Court to make a distribution (by way of an interim dividend) to preferential and unsecured non-preferential creditors of LBIE.
The administrators have given notice to all known creditors of their intention to pay that interim dividend. The notice specifies 31 December 2010 as the last date for creditors to lodge proofs of debt with the administrators. Creditors who do not lodge a proof of debt by that date may lose or reduce their ability to share in the interim dividend.
In addition, the giving of the notice of the administrators' intention to make a distribution brings into effect certain provisions of the English Insolvency Rules, including rules relating to mandatory set-off.
A copy of the notice can be obtained from the administrators' website: http://www.pwc.co.uk/pdf/LBIE_notice_21209.pdf
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