Preview Newsletter
Lehman Aug 5
-
Judge Approves Third Distribution to Lehman Brokerage Creditors
Aug 4, 2015 | Dow Jones - Daily Bankruptcy Review
By Joseph Checkler
The trustee in charge of Lehman Brothers Inc. on Tuesday won court approval to pay $1.89 billion more to the defunct brokerage's unsecured creditors, the third such distribution since he finished paying off the brokerage's customers last year. The payments, expected to be made this year, will bring the total amount returned to unsecured... -
Lehman Gets Green Light For $1.89B Creditor Distribution
Aug 4, 2015 | Law360
By Jonathan Randles
The liquidating trustee for Lehman Brothers Inc. got approval from a New York bankruptcy judge Tuesday to distribute approximately $1.89 billion for customers of Lehman's brokerage business, pushing the total payout for unsecured general creditors to $7.8 billion. -
How Jeb Bush Spent His Years on Wall Street
Aug 4, 2015 | The Wall Street Journal
By Justin Baer
Ten weeks before the collapse of Lehman Brothers Holdings Inc., a financial disaster that ushered in the global economic crisis in September 2008, Jeb Bush was in Mexico City to seek help from billionaire Carlos Slim.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Unsecured Creditors
Comment - Jeb Bush
Full Text of Stories Below
-
Judge Approves Third Distribution to Lehman Brokerage Creditors
Aug 4, 2015 | Dow Jones - Daily Bankruptcy Review
By Joseph Checkler
The trustee in charge of Lehman Brothers Inc. on Tuesday won court approval to pay $1.89 billion more to the defunct brokerage's unsecured creditors, the third such distribution since he finished paying off the brokerage's customers last year.
The payments, expected to be made this year, will bring the total amount returned to unsecured creditors to more than $8 billion, a recovery of about 35 cents on the dollar. Combined with distributions made to customers, the total amount recovered in the brokerage's liquidation will be around $114 billion.
Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan commended trustee James W. Giddens for the efforts.
"It's an extraordinary accomplishment in most any case, and it's an incredibly strong accomplishment in this case," the judge said in approving the distribution. She added, "I'm hoping that the number will go even higher when we're done."
Mr. Giddens said, "This is another great stride in winding down the LBI estate. We have already paid far more on allowed unsecured general creditor claims than what was expected at the outset of the liquidation, and we remain focused on resolving outstanding issues so that all remaining available assets can be distributed."
A lawyer for Mr. Giddens said that after this third distribution, further payouts would be contingent on winning or settling pending litigation, which would free up funds currently on reserve.
The trustee began paying back creditors---former employees, pension funds, banks and investment firms with unsecured claims against the brokerage--last summer after making the brokerage's customers whole.
The distinction between "customer" and "creditor" is a crucial one in the Lehman case. Customer claims get paid before creditor claims under the law covering failed broker-dealers, the Securities Investor Protection Act of 1970.
Customers get 100% of their money back, while unsecured creditors get much less.
As Mr. Giddens has resolved and settled more claims, he has asked a judge to approve distributions to the creditors.
Individual customers of the U.S. brokerage, which is under the purview of the bankruptcy court but not technically in bankruptcy protection, received about $92.3 billion almost immediately after Lehman collapsed. In all, Mr. Giddens will have exceeded his goal of returning $110 billion by $4 billion when this distribution is finished.
Lehman, once the nation's fourth-largest investment bank by assets under management, collapsed into the largest bankruptcy ever in September 2008 with $613 billion in liabilities...
For full story:
http://bankruptcynews.dowjones.com/Article?an=DJFDBR0120150804eb84jxu1m&cid=32135012&ctype=ts&pid=310&ReturnUrl=http%3a%2f%2fbankruptcynews.dowjones.com%2fArticle%3fan%3dDJFDBR0120150804eb84jxu1m%26cid%3d32135012%26ctype%3dts%26pid%3d310
-
Lehman Gets Green Light For $1.89B Creditor Distribution
Aug 4, 2015 | Law360
By Jonathan Randles
The liquidating trustee for Lehman Brothers Inc. got approval from a New York bankruptcy judge Tuesday to distribute approximately $1.89 billion for customers of Lehman's brokerage business, pushing the total payout for unsecured general creditors to $7.8 billion.
At a hearing in Manhattan, U.S. Bankruptcy Judge Shelley Chapman signed off on LBI's third interim distribution to general creditors. James Giddens, LBI's liquidating trustee, said the multibillion-dollar distributions to unsecured general creditors is far greater than the estate's handlers originally anticipated at the outset of the Lehman bankruptcy in 2008.
“This is another great stride in winding down the LBI estate,” Giddens said in a statement. “We have already paid far more on allowed unsecured general creditor claims than what was expected at the outset of the liquidation, and we remain focused on resolving outstanding issues so that all remaining available assets can be distributed.”
LBI made the request for the third distribution last month. The brokerage firm's customers have so far received more than $106 billion throughout the course of the bankruptcy, satisfying 111,000 customer claims, Giddens said. Including the third distribution, distributions to both LBI customers and other creditors will reach $114 billion, ”the largest distributions across the worldwide Lehman insolvency proceedings,” according to the trustee.
Tuesday's hearing comes weeks after Judge Chapman signed off on a $1.3 billion settlement between LBI and Barclays Capital Inc. that resolved a dispute over the sale of the collapsed investment bank's brokerage business. The settlement allowed the LBI estate to free up for unsecured creditors more than $600 million that had been tied up in a litigation reserve.
The Barclays settlement was announced several months after LBI lost at the Second Circuit. The appellate panel upheld U.S. District Judge Katherine B...For full story:
http://www.law360.com/articles/687125/lehman-gets-green-light-for-1-89b-creditor-distribution
-
How Jeb Bush Spent His Years on Wall Street
Aug 4, 2015 | The Wall Street Journal
By Justin Baer
Ten weeks before the collapse of Lehman Brothers Holdings Inc., a financial disaster that ushered in the global economic crisis in September 2008, Jeb Bush was in Mexico City to seek help from billionaire Carlos Slim.
Mr. Bush signed on with Lehman after leaving the Florida governor’s mansion, making it clear he wanted work as a hands-on investment banker rather than hold a ceremonial role typically given ex-politicians. Now was his chance.
Mr. Bush was a longtime acquaintance of Mr. Slim, at the time ranked as the world’s second wealthiest individual and one of several deep-pocketed investors on Lehman’s radar. “Project Verde” was supposed to bring home badly needed cash and confidence. Mr. Slim, however, was more interested in talking baseball than investing in the troubled firm.
More doors closed that summer before Lehman shut its own, but Mr. Bush, following in the footsteps of a grandfather and great-grandfather, latched onto investment banking through the worst downturn since the Great Depression.
For more than seven years, nearly the length of his two gubernatorial terms, Mr. Bush, a candidate for the Republican presidential nomination, spent as much as half of his working hours advising Lehman and later Barclays, which bought the collapsed investment bank’s U.S. business. He wasn’t an employee of the firms, said people familiar with the matter, but was paid to attend meetings, dinners and conferences where he spoke to clients and bank executives on such subjects as health care, education, immigration and energy—matters he has started taking up this year with voters.
Mr. Bush earned about $1.3 million a year at Lehman and some $2 million from Barclays, his campaign said. Valued on Wall Street
Bankers and trading executives described Mr. Bush’s contributions as “rich in content,” which on Wall Street translates to having the kind of timely expertise that clients expect from top firms on topics essential to their investments.
“I spent a lot of time, I probably spent about 40% of my time working for Barclays,” Mr. Bush told reporters in June. “I did a lot of their conferences where I spoke and I interacted with their clients.”
Mr. Bush received a warm welcome on Wall Street, where financial firms often seek former political figures to help open doors. At least six firms offered Mr. Bush a position when he finished his second term as governor in January 2007, according to people familiar with the matter.
When he joined Lehman in June that year, Mr. Bush was the brother of a sitting U.S. president, George W. Bush, and already had ties with the investment bank, known for its scrappy culture and aggressive management team led by chief executive Richard Fuld, a longtime Democrat.
Mr. Bush would spend most of his time at Lehman working under Steve Lessing, who had been a “Ranger” for George W. Bush, a title for supporters who raised at least $200,000 for Mr. Bush’s 2004 presidential campaign. Mr. Lessing headed client-relationship management and was the face of the firm to many money managers, hedge funds and insurance companies.
Mr. Bush soon drew the attention of Lehman’s senior investment bankers, who looked for ways to put him in front of clients. He appeared at conferences for health-care clients and corporate directors, and joined a ski junket for bankers, people familiar with the matter said. He crisscrossed the country and flew commercial, often alone.
In late 2007, Lehman executives who spotted him striding past in midtown Manhattan— BlackBerry pressed to his ear—said they recalled thinking that Mr. Bush, in a matter of months, had completed his transition from governor to harried bank executive. “This guy is the brother of the president, just walking by himself, no security,” a former Lehman manager said.
Mr. Bush said he spent most of his time at Lehman “dealing with their customer base, providing insights in things like the madness of Washington, D.C.”
...Earlier this year, a political-action committee that has endorsed Mr. Paul launched an ad campaign dubbed “Bailout Bush.” The group criticized Mr. Bush for, among other things, his stints at Lehman and Barclays, as well as his past endorsement of government support for banks during the crisis.
At a November 2013 event for a Wall Street trade group, Mr. Bush said banks have been unfairly maligned. Privately, he has voiced issues with the landmark Dodd-Frank bill to overhaul financial regulations after the crisis.
“If you listen to most of the media, the banks and the financial industries in general are bad, and they should be shrunk or taken apart,” Mr. Bush said at the 2013 gathering, adding that a “strong banking sector is essential to provide the capital that fuels economic growth.”
He also said that banks, “while having made some terrible and costly decisions in the past, are now doing business in a much more responsible way.”
Mr. Bush’s contracts with Lehman and Barclays stipulated the firms wouldn’t ask him to lobby Washington, people familiar with the matter said. As Barclays and other banks scrambled to influence the wave of new rules in the wake of the financial crisis, former colleagues said, Mr. Bush stayed out of it. Related Fox News Announces Prime-Time GOP Debate Lineup
Around the time of his 2008 Mexico City trip, Mr. Bush was on the board of a Lehman fund pursuing investments in toll roads and other public works. His successor, Florida Gov. Charlie Crist, in the months after Mr. Bush left office, had signed a bill allowing the state to lease some toll roads, including a stretch of interstate 75, known as Alligator Alley.
Mr. Bush studied documents and advised Lehman executives on the deal, as well as the state’s political pitfalls, according to people familiar with the discussions. Mr. Bush brought lots of energy and “creative problem-solving skills” to Lehman, said Emil Henry, a former executive with the firm who has been active in GOP politics.
By August 2008, Lehman had joined a consortium that was among six bidders on the project. The firm collapsed the following month and Barclays, a U.K.-based lender, bought its U.S. operations following a bankruptcy filing. Lehman’s fall
Mr. Bush said he wasn’t consulted about Lehman’s difficulties as it veered toward bankruptcy, according to congressional testimony and people familiar with the matter. During a 2012 U.S. House committee hearing, he said no one asked him to intervene on behalf of the firm. Mr. Bush said Mr. Fuld, Lehman’s chief executive, “didn’t ask me to do anything, and I didn’t do anything.”
...Lehman was canvassing a number of rival banks and financial companies in the wake of Bear Stearns Cos.’s near-collapse and rescue by J.P. Morgan Chase & Co. earlier that year.
The trip also gave Mr. Bush a chance to accompany Arizona’s Sen. McCain, the Republican presidential candidate, for part of a campaign swing to Latin America. On July 3, Mr. Bush joined Mr. McCain and his wife for a tour of the Basilica of Our Lady of Guadalupe.
Mr. Bush and a handful of Lehman advisers also met with Mr. Slim in his office that day to propose a number of deals, including an investment in Lehman. The answer, the Lehman team soon learned, was no.
“Project verde was unsuccessful,” Mr. Bush wrote to a colleague after the meeting in a July 5, 2008 email made public during Lehman’s bankruptcy proceedings. “He did not express interest in jv or stock purchase.”
About two months later, on the Monday that Lehman filed for bankruptcy, Mr. Bush was in Florida alongside Mr. McCain.
At a campaign stop in Jacksonville, Mr. McCain railed against the Bush administration’s failure to regulate Wall Street and said taxpayers shouldn’t pay for Lehman’s bailout. “I promise you we will never put America in this position again,” Mr. McCain told voters. “We will clean up Wall Street.”
For full story:
http://www.wsj.com/articles/how-jeb-bush-spent-his-years-on-wall-street-1438741822
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Unsecured Creditors
Comment - Jeb Bush
Full Text of Stories Below
Add recipients
Suggested