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Lehman Brothers Finance SA

1. Lehman Just Won’t Die as London Cases Delay Final Reckoning

   May 14, 2015 | Bloomberg

   By Kit Chellel
   
   
   Two court cases in one day show that nearly seven years after the collapse of Lehman Brothers Holdings Inc., London lawyers are still fighting over deals that blew up in September 2008. On Tuesday, a London judge ordered Lehman’s Swiss unit to pay about $62 million to an Italian pension fund for losses on a hedge fund transaction.
2. UK Finds Italian Pension Fund Due $62M Over Lehman Losses

   May 13, 2015 | Law360

   By Ben Conarck
   
   
   A British high court judge on Tuesday ruled that an Italian pension fund is entitled to $61.5 million in losses plus interest stemming from a €780 million ($886 million) investment in a structure devised by Lehman Brothers International Europe, unconvinced by arguments that the fund improperly calculated the figure.

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Client Attorney Privileged/Attorney Work Product/At Request of Counsel

Lehman Brothers Finance SA

1. Lehman Just Won’t Die as London Cases Delay Final Reckoning

   May 14, 2015 | Bloomberg

   By Kit Chellel

   Two court cases in one day show that nearly seven years after the collapse of Lehman Brothers Holdings Inc., London lawyers are still fighting over deals that blew up in September 2008.

   On Tuesday, a London judge ordered Lehman’s Swiss unit to pay about $62 million to an Italian pension fund for losses on a hedge fund transaction. In another courtroom, about 500 yards away, the administrators of U.K.-based Lehman Brothers International Europe got approval for a trial in the case against an Exxon Mobil Corp. unit over a $250 million deal.

   PricewaterhouseCoopers, appointed to liquidate Lehman Brothers International Europe, has paid out about 35 billion pounds ($55 billion), according to an April progress report. While creditors have their money back, there’s still about 6 billion pounds in interest to be divided up.

   “A series of complex legal questions need to be answered before we can do that,” Tony Lomas, a PwC partner, said in an e-mail. “Those questions are being addressed in a series of court direction hearings.”

   There are about 20 cases in the U.K., U.S., Germany and Greece, according to the most recent PwC report. On Thursday, a London appeals court will rule on another dispute between Lehman units in the U.K. and U.S. Pension Fund

   Fondazione Enasarco, a 4 billion-euro ($4.5 billion) Italian pension fund, sought to recoup its losses on a 780 million-euro investment set up by Lehman, which spread the money among about 200 hedge funds and sought to mitigate losses by buying derivatives. Judge David Richards said administrators of Switzerland-based Lehman Brothers Finance should pay about $62 million under default provisions to cover the fund’s losses...

   For full story:

   http://www.bloomberg.com/news/articles/2015-05-13/lehman-just-won-t-die-as-london-lawsuits-delay-final-reckoning
   

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2. UK Finds Italian Pension Fund Due $62M Over Lehman Losses

   May 13, 2015 | Law360

   By Ben Conarck

   A British high court judge on Tuesday ruled that an Italian pension fund is entitled to $61.5 million in losses plus interest stemming from a €780 million ($886 million) investment in a structure devised by Lehman Brothers International Europe, unconvinced by arguments that the fund improperly calculated the figure.
   
   The complex legal battle centered on the calculation of the loss figure in the investment following an early termination of a put option triggered by Lehman’s collapse. Switzerland-based Lehman Brothers Finance SA contended the pension fund, Fondazione Enasarco, did not calculate the loss in accordance with the master agreement because it did not determine the figure at the “earliest reasonably practice date” and improperly related terms of a replacement transaction to those of the put option, according to the decision released by the British Chancery Court.
   
   LBF in particular criticized Enasarco for adopting “an over-complex approach” to its attempts to replace the put option, delaying quotations for new protection despite the willingness of some banks to offer adequate protection of the investment, according to the decision.

   ...  LBF, meanwhile, calculated a loss of $42 million plus interest, contending that ARIC or Enasarco would have been able to enter into more beneficial replacement transaction rate than the one payable under the put option.
   
   Much of the dispute centered on Enasarco’s quest for a replacement transaction to safeguard its capital following the collapse, a long and complicated history set out in the decision by Justice Richards.
   
   While Enasarco said the history shows that replacing the put option was a time-consuming and complex process, especially given the condition of the market in the wake of the collapse, LBF relied on it to show that Enasarco’s process of obtaining quotations for a replacement transaction “unnecessarily complicated and delayed.”
   

   “Enasarco relies on the evidence, which I have accepted, that it was vital to the protection of its present and future pensioners that it secured a satisfactory replacement for the put option as soon as possible, and that it was under great pressure to do so,” Justice Richards said.
   
   Enasarco is represented by Mark Hapgood and Jasbir Dhillion of Sidley Austin LLP.
   
   LBF is represented by Jonathan Nash and Sophie Mallinckrodt of Field Fisher Waterhouse LLP.
   
   The case is Fondazione Enasarco v Lehman Brothers Finance SA & Anor, case number HC13B03839, in the High Court of Justice’s Chancery Division.

   For full story:

   http://www.law360.com/articles/655051/uk-finds-italian-pension-fund-due-62m-over-lehman-losses

   
   
   

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