Big surprise for Lehman creditors
(18 May 2011 – Australia) Australian, New Zealand and Papua New Guinean investors will receive a A$100 million surprise from collapsed investment banking giant Lehman Brothers.
The out-of-court settlement reached between the Australian trustee of the notes, Perpetual Trustee Company, and the liquidator of Lehman, will mean 1000 retail investors including charities, local councils and a number of superannuation funds will be receiving cheques over the next month.
Those holding Mahogany Notes Series I will receive 85¢ in the dollar while Mahogany Series II will get 69¢ in the dollar.
While this outcome will not have any impact on many other local investors that have been fighting Lehman to recover funds, it may provide some indication of the willingness for the Lehman liquidators to settle the billions in outstanding claims.
One of the main reasons Perpetual was able to reach agreement with Lehman was that it got in early and started its action before a stay of proceedings was given by the US Bankruptcy Court.
Another reason for the success in retrieving this payout relates to the quality of the underlying security of these two particular series of notes. The higher paying Mahogany Notes Series I was backed by ANZ notes and the Series II by Royal Bank of Scotland.
While appeals are still on foot at this stage the two legal jurisdictions have conflicting judgments.
The Perpetual legal settlement was agreed to last November; however its terms included a confidentiality agreement on the financial terms until last night.
Those holding Mahogany Notes Series I will receive 85¢ in the dollar while Mahogany Series II will get 69¢ in the dollar.
While this outcome will not have any impact on many other local investors that have been fighting Lehman to recover funds, it may provide some indication of the willingness for the Lehman liquidators to settle the billions in outstanding claims.
One of the main reasons Perpetual was able to reach agreement with Lehman was that it got in early and started its action before a stay of proceedings was given by the US Bankruptcy Court.
Another reason for the success in retrieving this payout relates to the quality of the underlying security of these two particular series of notes. The higher paying Mahogany Notes Series I was backed by ANZ notes and the Series II by Royal Bank of Scotland.
While appeals are still on foot at this stage the two legal jurisdictions have conflicting judgments.
The Perpetual legal settlement was agreed to last November; however its terms included a confidentiality agreement on the financial terms until last night.
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