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Lehman May 8
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3rd Circ. Published Ruling Calls Out Gateway For Omitted Doc
May 7, 2015 | Law360
By Kurt Orzeck
The Third Circuit on Thursday affirmed a district court's judgment holding Gateway Funding Diversified Mortgage Services LP liable to Lehman Brothers Holdings Inc. in a mortgage-loan indemnification dispute, ruling in a published opinion that Gateway omitted a necessary transcript from the appellate record. -
Moore Capital Settles Dispute Over $12M With Lehman Trustee
May 7, 2015 | Law360
By Pete Brush
Moore Capital Management LPreached a resolution Thursday in a dispute with the trustee for bankrupt Lehman Brothers Inc. over who is entitled to a $12 million cash balance on money deposited before the bankruptcy for foreign currency trades. U.S. District Judge Shira A. Scheindlin signed off on the dismissal with prejudice, the terms... -
PwC Leads £675m Lehman Pension Deal
May 7, 2015 | AccountancyAge
By Richard Crump
A £675m funding deal for the defined benefit pension scheme of Lehman Brothers' European arm has been completed after administrators from PwC struck an agreement to transfer the risk of the scheme to insurer Rothesay Life. PwC, as administrators for the collapsed bank, led the transaction - the largest bulk annuity deal written this... -
Lehman Brothers' UK Pension Scheme Agreed at £675 Million
May 7, 2015 | Domain-B
The UK pension scheme of defunct US bank Lehman Brothers has agreed to a £675 million ($1 billion) "bulk annuity" deal to transfer the risk of the scheme to pensions insurer Rothesay Life, both parties said yesterday. The growing bulk annuity market in UK allows insurers to take on the risk of company defined benefit, or final salary...
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Gateway Funding Diversified Mortgage Services LP
Moore Capital Management LP
Rothesay Life
Full Text of Stories Below
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3rd Circ. Published Ruling Calls Out Gateway For Omitted Doc
May 7, 2015 | Law360
By Kurt Orzeck
The Third Circuit on Thursday affirmed a district court's judgment holding Gateway Funding Diversified Mortgage Services LP liable to Lehman Brothers Holdings Inc. in a mortgage-loan indemnification dispute, ruling in a published opinion that Gateway omitted a necessary transcript from the appellate record.
Dismissing Gateway’s appeal, the three-judge panel said Rule 10 of the Federal Rules of Appellate Procedure requires an appellant to order a transcript of parts of the proceedings not already on file as the appellant considers necessary. Although Rule 10 doesn’t provide for sanctions for failure to compile the record, Rule 3 says such a failure allows the appeals court to dismiss the appeal.
A Lehman subsidiary bought loans from Arlington Capital Mortgage Corp., which subsequently agreed to indemnify Lehman for losses on the loans. Since Arlington had no remaining assets with which to indemnify Lehman when those losses occurred, Lehman successfully sought to recover $450,000 plus interest from its successor, Gateway, after a trial determined that it had entered into a de facto merger with Arlington.
Gateway argued that the lower court shouldn’t have granted summary judgment because a clause in the indemnification agreement may have extinguished Arlington’s, and thus Gateway’s, liability. While the judge claimed Gateway waived that claim during oral argument, Gateway insisted that it never did. It also argued that — since Lehman filed a transcript of the hearing — the transcript is now part of the record.
The three-judge panel on Thursday disagreed with “Gateway’s cavalier argument” that it was irrelevant it didn’t file the transcript.
“This appeal presents us with an opportunity to emphasize the importance of following the rules,” the appeals court said. “Gateway’s Rule 10 violation at best shows a remarkable lack of diligence and at worst indicates an intent to deceive this court.”
The Third Circuit judges added that even if they did consider the transcript, they likely wouldn’t have disturbed the lower court ruling because that court gave Gateway multiple chances to advance its argument before dismissing it.
Lehman filed suit in 2011 in Pennsylvania federal court, claiming Gateway was obligated to make good on four mortgage loans that a Lehman subsidiary had bought nearly a decade earlier from Arlington Capital Mortgage Corp. Three of the loans were the subject of two contracts from May 2007 in which Arlington agreed to indemnify Lehman for losses on the loans, according to court papers.
In 2008, Arlington sold its assets to Gateway, court filings said. Since Arlington had no assets to satisfy Lehman’s claims for indemnification when losses on the three loans occurred, Lehman sought recovery from Gateway as Arlington’s alleged successor under Pennsylvania’s de facto merger doctrine.
U.S. District Judge Anita B. Brody ruled that although it was clear Arlington was liable to Lehman on the three loans, it wasn’t clear whether Gateway was liable for Arlington’s debts, according to court documents. After a bench trial, the court decided that a de facto merger had occurred between Gateway and Arlington.
The Third Circuit on Thursday said it was unconvinced by Gateway’s arguments that Judge Brody erred by denying Gateway a continuance to obtain expert witnesses, denying its motion to consolidate and finding that a de facto merger had occurred.
“Gateway rehashes the arguments it made to the district court, essentially asking us to weigh the evidence anew and make factual findings,” the appeals judges held. “The district court’s decision was guided by the correct legal principles and supported by significant evidence.”
An attorney for Lehman Brothers declined comment. Attorneys for Gateway didn’t immediately respond to requests for comment late Thursday...For full story:
http://www.law360.com/articles/653104/3rd-circ-published-ruling-calls-out-gateway-for-omitted-doc
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Moore Capital Settles Dispute Over $12M With Lehman Trustee
May 7, 2015 | Law360
By Pete Brush
Moore Capital Management LPreached a resolution Thursday in a dispute with the trustee for bankrupt Lehman Brothers Inc. over who is entitled to a $12 million cash balance on money deposited before the bankruptcy for foreign currency trades.
U.S. District Judge Shira A. Scheindlin signed off on the dismissal with prejudice, the terms of which were not disclosed, but noted the case could be reopened if the settlement is not effected.
Cross-motions for summary judgment had been pending in the matter.
In a 2014 filing in bankruptcy court Moore Capital Management funds said they paid Lehman $60 million to settle amounts owed under swap agreements, which they entered into with Lehman Brothers Special Financing Inc. in July 2008, just a couple of months before Lehman sought Chapter 11 relief.
More recently, according to Moore, the trustee said that the $60 million wasn’t enough and that the funds owed it more money including interest.
Moore then went before Judge Scheindlin in district court asserting it was a customer of Lehman under the Securities Investor Protection Act, entitling it to a priority claim to a disputed $12 million cash balance.
In March Judge Scheindlin held that Moore was not a customer of Lehman for the purposes of its demand for full repayment. She called for additional proceedings to determine who the $12 million cash balance belonged to.
On the customer dispute, the U.S. Commodity Futures Trading Commission said in a January amicus brief that to declare Moore Capital Management a customer of LBI would set a “dangerous precedent” that unregulated, off-exchange foreign exchange dealings are covered against losses by the Securities Investor Protection Act.
“[Moore’s] position is untenable as a matter of law because deposits that Moore made to Lehman Bros. in connection with forex trades were never subject to the customer-property protections required by [agency] regulations for commodity contracts,” the CFTC said.
The brief backed up the position of LBI’s liquidating trustee, James Giddens, that SIPA’s protections for securities investors don’t extend to currency traders that wager on currency fluctuations under contracts to buy or sell at an agreed-upon exchange rate...For full story:
http://www.law360.com/articles/653052/moore-capital-settles-dispute-over-12m-with-lehman-trustee
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PwC Leads £675m Lehman Pension Deal
May 7, 2015 | AccountancyAge
By Richard Crump
A £675m funding deal for the defined benefit pension scheme of Lehman Brothers' European arm has been completed after administrators from PwC struck an agreement to transfer the risk of the scheme to insurer Rothesay Life.
PwC, as administrators for the collapsed bank, led the transaction - the largest bulk annuity deal written this year - which ensures that all members will get their pensions in full, six and a half years after Lehman collapsed. The deal comes ten months after those running the scheme reached a £184m settlement with administrators of the failed bank.
The payments will be made via the scheme initially, with Rothesay Life taking over responsibility for paying benefits to members directly when the bulk annuity converts to a full buy-out, PwC said.
Since the insolvency of Lehman Brothers in 2008, the scheme has been subject to an "assessment period" under the Pensions Act 2004. As a result, the benefits payable to current pensioners have had to be restricted. When the assessment period ends in July 2015, these restrictions will be lifted and benefits will be paid in full (including back-payments).
Paul Kitson, partner and risk transaction team leader at PwC, said the firm used analytics software to complete the deal at "competitive pricing"...
For full story:
http://www.accountancyage.com/aa/news/2407410/pwc-leads-gbp675m-lehman-pension-deal
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Lehman Brothers' UK Pension Scheme Agreed at £675 Million
May 7, 2015 | Domain-B
The UK pension scheme of defunct US bank Lehman Brothers has agreed to a £675 million ($1 billion) "bulk annuity" deal to transfer the risk of the scheme to pensions insurer Rothesay Life, both parties said yesterday.
The growing bulk annuity market in UK allows insurers to take on the risk of company defined benefit, or final salary, pension schemes.
Many of these schemes are running in deficit due to weak investment returns thanks to low interest rates, and most do not allow new members.
The Lehman Brothers collapsed in 2008, triggering along with other factors, the global financial crisis.
"Since the bankruptcy of Lehman Brothers ... the trustees have been striving to secure the pension benefits promised to members of the scheme," Peter Gamester, chairman of the trustees of the scheme, said in a statement.
"The agreement with Rothesay Life achieves this goal, as it enables members' defined benefit entitlements to be paid in full."
The scheme had been subject to an "assessment period" following the bank's insolvency, according to the statement of the scheme's trustees and Rothesay Life. Payments to current pensioners had been restricted.
The assessment period would close, July 2015, when benefits would be fully paid, including back payments, they added.
The scheme had 2,250 members according advisers PwC.
Rothesay, co-owned by Goldman Sachs, Blackstone and Singapore's sovereign wealth fund GIC, had taken on £675 million worth of assets owned by the plan and would pay the pensions of about 2,300 ex-Lehman employees.
Lehman pensions were paid by the UK's pension lifeboat fund, the Pension Protection Fund (PPF), in the years following the collapse of the company but future payments are capped at just over £36,000 a year.
The restrictions would be lifted from July and benefits paid in full including back payments...
For full story:
http://www.domain-b.com/companies/companies_l/Lehman_Brothers/20150507_pension.html
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Gateway Funding Diversified Mortgage Services LP
Moore Capital Management LP
Rothesay Life
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