Previously, on June 16, 2010, the Joint Administrators (the “Administrators”) of Lehman Brothers International (Europe) (“LBIE”) announced that they would be testing the feasibility of their so-called Consensual Approach to the resolution of LBIE’s unsecured creditor claims. They anticipated the Consensual Approach would be applicable to financial trading creditors ("FTCs") and conceptually outlined the Consensual Approach as follows:
- Under the Consensual Approach, LBIE would offer to agree on the amount of each participating FTC’s claim by substituting in place of the FTC’s claim value a value determined by LBIE using its own methodology (the “LBIE Determination”).
- The LBIE Determination would be established using a comprehensive set of processes, data sources and valuation models, all subject to comprehensive review and universally applied to the unsecured creditors falling within the scope of the Consensual Approach.
- The offer by LBIE would be conditional upon the acceptance of the LBIE Determination by an overwhelming majority of the FTCs. The Administrators continue to work with the Unsecured Creditors’ Resolution Working Group (“UCRWG”) to define the pre-requisite threshold level of support required to implement this Consensual Approach.
- If the required level of acceptance is met, the claims of participating FTCs would be admitted for dividend in the administration of LBIE at the LBIE Determination.
- The Administrators are also exploring whether it might be possible to provide participating FTCs and other unsecured creditors with admitted claims with an option of receiving a one-off cash payment in full and final settlement of their claim.
The Administrators previously had advised claimants to submit proofs of debt before September 17, 2010, to be considered for participation in the Consensual Approach.
On September 15, 2010, the Administrators announced that they have agreed, in conjunction with the UCRWG, to extend the September 17, 2010, deadline for proof of debt submissions. The Administrators are currently considering an appropriate date for a revised deadline and possible refinements to the proposed Consensual Approach.
The Administrators intend to communicate further developments regarding the Consensual Approach in their 4th Progress Report due to be published on October 14, 2010. The report will include an update on the revised proof of debt submission deadline, unless it is otherwise communicated to claimants separately in the meantime.