Privately-held Lehman Brothers Holdings’ (LBHI) subsidiaries Lehman Brothers U.K. Holdings (Delaware) (LUK) and Lehman Pass-Through Securities (LPTSI) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, lead case number 17-12442. The Companies, whose parent LBHI operated as an investment banker prior to its March 2012 liquidation, is represented by Garrett A. Fail of Weil, Gotshal & Manges.
LUK’s principal assets are debt and equity positions and include the following: (i) claims against certain non-controlled foreign affiliates of the LBHI Debtors; (ii) an equity investment in New Omaha Holdings and (iii) claims against LBHI and certain other LBHI Debtors. LPTSI’s principal assets are primarily real-estate-related assets and include the following: (i) a portfolio of approximately 1,400 residential-mortgage-backed securities; (ii) loan receivables from Huntlee Pty Limited; (iii) an equity interest in a lender to certain French real-estate companies; (iv) claims against a certain non-controlled foreign affiliate of the LBHI Debtors and (v) a limited partner interest in Silverpeak Legacy Pension Partners III.
In September 2008, LBHI filed for Chapter 11 protection, listing nearly $700 billion in assets; and this remains the largest U.S. Bankruptcy Court proceeding ever.
According to LBHI managing director Christopher Mosher, “Both LUK and LPTSI were entities managed and controlled by the LBHI Debtors upon the effective date of the LBHI Plan and are Debtor-Controlled Entities under the LBHI Plan….The multiple objectives of LUK and LPTSI in these chapter 11 cases include: (i) confirming and finally establishing that the liabilities on their balance sheets are their only liabilities; (ii) identifying any unknown claims, executory contracts, or unexpired leases that may exist; (iii) providing appropriate treatment for their respective obligations under a chapter 11 plan; and (iv) preserving the value of their assets. Ascertaining certainty of the Debtors’ liabilities and preservation of asset value will also enable the Plan Administrator to obtain the maximum value from LBHI’s remaining equity interests in LUK and LPTSI.” LUK’s Chapter 11 petition indicates total assets greater than $500 million.
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