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Lehman Brothers

Senior Noteholders

Frequently Asked Questions

A: Wilmington Trust serves as successor indenture trustee to Citibank under the Indenture. Under the terms of the Indenture, Wilmington Trust succeeded to the trusteeship on May 14, 2008. Although Citibank resigned as indenture trustee, it retained the roles of paying agent and securities registrar under the Indenture.

Wilmington Trust also serves as Co-Chair to the Committee, a representative body for all unsecured creditors. Contact information for the Committee is listed below.

Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, NY 10005-1413
Phone: (212) 530-5000
Fax: (212) 530-5219
Attn: Dennis F. Dunne
Evan Fleck
Dennis O’Donnell
www.lehmancreditors.com

A: The Indenture dated as of September 1, 1987 is between LBHI and the Trustee. The Indenture is the contract underlying the note issue and outlines the rights and duties of the Senior Noteholders, the Trustee and the Issuer, LBHI. The Indenture is supplemented and amended by six supplemental indentures:
First Supplemental Indenture dated as of November 25, 1987
Second Supplemental Indenture dated as of November 27, 1990
Third Supplemental Indenture dated as of September 13, 1991
Fourth Supplemental Indenture dated as of October 4, 1993
Fifth Supplemental Indenture dated as of August 1, 1995
Sixth Supplemental Indenture dated as of June 26, 1997

The Indenture is an open-ended indenture that permitted LBHI to issue multiple series of Senior Notes. The specific terms and conditions of the Senior Notes are described in various documents in addition to the Indenture including, prospectuses, prospectus supplements, product supplements, pricing supplements, notes, calculation agency agreements and term sheets, among other agreements. A conformed copy of the Indenture is included in the Global Proof of Claim provided here.

A: A list that includes the CUSIP number and maturity date of each Senior Note for which Wilmington Trust serves as Trustee is available here.

A: CUSIP stands for Committee on Uniform Securities Identification Procedures. A CUSIP number consists of nine characters (alphabetical and numerical) that uniquely identify a specific security. Senior Noteholders may confirm the CUSIP number of their Senior Notes by reviewing their account statements or purchase confirmations and by contacting their broker. The Trustee does not have any information regarding personal transactions in Lehman securities.

A: No. The Senior Notes are held in "street name," which means that DTCC is the named holder of the notes and individual noteholders are only the beneficial owners. Individual Noteholder lists are maintained by the broker-dealers that clear trades for noteholders, and there is not one centralized noteholder database.

A: Holders of Lehman securities for which Wilmington Trust does not serve as trustee (and not included on the Senior Notes list) may review the Master List of Securities dated as of August 20, 2009, available here or contact the Lehman Legal Hotline at (212) 310-8040 or LehmanTeam@weil.com for information regarding Lehman securities. Wilmington Trust is not the indenture trustee for any foreign denominated note issuances or for the US subordinated note issuances and cannot provide advice or information with respect to such non-Indenture debt.

A: The Senior Notes were not cancelled and continue to trade. Senior Noteholders should consult their brokers or other advisors for trading information and advice. Wilmington Trust is unable to provide trading information or advice to Senior Noteholders.

A: It is the Trustee’s current understanding that LBHI is not processing or paying on Senior Notes with a death put or survivor’s option. Senior Noteholders may contact the Lehman Legal Hotline at (212) 310-8040 or LehmanTeam@weil.com for more information.

A: There is no need to notify Wilmington Trust in the event a Senior Noteholder changes brokers. Such a change should not impact notifications or distributions of payments to Senior Noteholders.

A: The deadline for filing proofs of claim against LBHI, based on claims arising prior to LBHI’s bankruptcy, expired on September 22, 2009 at 5:00 p.m. (Eastern Time) (the "Bar Date"). Wilmington Trust timely filed the Global Proof of Claim on behalf of the Senior Noteholders on September 2, 2009. If you are a Senior Noteholder, your individual claim is incorporated in the aggregate claims described in the Global Proof of Claim.

A: If an individual noteholder’s claim were allowed in addition to the Global Proof of Claim, the noteholder would recover twice - under the Trustee’s Global Proof of Claim as well as under the individual claim. Double recoveries of this sort are not permitted under the Bankruptcy Code. As a result, the Debtors are in the process of objecting to and eliminating the individual noteholder claims that duplicate the Trustee’s Global Proof of Claim. The Debtors have already objected to and eliminated thousands of such duplicate individual noteholder claims. Senior Noteholders who filed individual claims that duplicate the Global Proof of Claim will receive direct, mailed notice from the Debtors of any objection and of the relevant hearing date. The Trustee is monitoring the claims objection process to ensure that only claims that are in fact duplicative of the Global Proof of Claim are eliminated.

A: Wilmington Trust filed the Global Proof of Claim reflecting (i) where available, the principal value at maturity of each Senior Note (or the principal amount issued and outstanding with respect to Senior Notes issued pursuant to an original issue discount), (ii) where available, the interest accrued from the date of last payment to September 15, 2008; and (iii) an undetermined amount for those Senior Notes that are structured notes ? i.e., notes in which in which the amount due at maturity is linked to the performance of underlying securities, currencies or currency baskets, index funds, commodities, or similar assets or indices subject to the movement of financial markets.

A: On August 31, 2011, Lehman Brothers filed its Third Amended Plan. The Third Amended Plan and related Third Amended Disclosure Statement include, among other things, the Debtors’ estimate of the percentage recovery for the allowed amount of the Senior Noteholder Claim. A summary chart including the estimated recovery for the Senior Noteholder Claim is included on page 6 of the Third Amended Disclosure Statement. The Senior Noteholder Claim is classified as a "Class 3" claim - "Senior Unsecured Claims against LBHI." The Debtors estimate that Class 3 claimants will recover 21.1% of the allowed amount of their claims. The estimated recoveries under the Debtors’ Third Amended Plan are subject to certain risks, uncertainties and assumptions. Accordingly, actual recoveries may vary from the estimated recoveries. Also the Debtors’ Third Amended Plan has not been confirmed by the bankruptcy court so Senior Noteholders should not rely on the recovery estimate. Senior Noteholders should refer to the Debtors’ Third Amended Plan and Third Amended Disclosure Statement for a complete discussion of the risks and uncertainties.

A: The Third Amended Disclosure Statement provides information regarding the Debtors’ methodology (the "Valuation Methodology") for valuing those Senior Notes that the Debtors identify as "structured securities." The Debtors identify "structured securities" as "notes that predominantly provide that the return at maturity and/or the payment of periodic interest is linked to the performance of an underlying asset or group of assets, including global indices, single stock, currencies, interest rates, and various credit derivative instruments and baskets thereof." The Senior Notes that fall within this definition (the "LBHI Structured Notes") are listed by CUSIP number here.

The Valuation Methodology that the Debtors have applied to all structured securities issued by any of the Debtors, including the LBHI Structured Notes, is described on pages 48-50 and Exhibit 11 of the Third Amended Disclosure Statement. The Debtors have generated a spreadsheet that identifies all structured securities by CUSIP number and sets out the maximum allowed claim amount for each structured security under the Valuation Methodology (the "Structured Securities List"). The LBHI Structured Notes are included on the Structured Securities List. The Structured Securities List is available electronically on the "Case Information" tab of the Debtors’ website, www.lehman-docket.com. Senior Notes that are not LBHI Structured Notes do not appear on the Structured Securities List and are not subject to the Valuation Methodology.

A: The Committee filed a statement in response to a motion by the Debtors seeking approval to use the Valuation Methodology and other procedures for structured securities that, unlike the Senior Notes, do not have an indenture trustee. The Committee’s statement provides:

"LBHI’s Structured Securities Valuation Methodology for the Structured Securities that the Debtors have categorized as fair market value notes ("FMV Notes") is based on "LBHI’s prepetition internal accounting methodology," and is reflected by the values of the Structured Securities listed on [LBHI’s prepetition general ledger] (the "GL"). Based on an extensive diligence process on a sampling of the Structured Securities conducted by FTI Consulting, Inc. ("FTI"), financial advisor to the Committee, the prepetition valuation methods used by LBHI appear to be generally consistent with comparable methods employed by broker-dealers for purposes of valuing securities on their financial statements at the time the GL values were determined. The Committee and its advisors recognize, however, that there are other reasonable methods to value these FMV Notes." A copy of the Committee’s statement is available here.

Based upon the information provided by the Committee, the Trustee believes that applying the Valuation Methodology to determine the allowed claim amounts for the LBHI Structured Notes is reasonable under the circumstances of the bankruptcy case. The Trustee subsequently informed Senior Noteholders of its intention to accept the allowed claim amounts for the LBHI Structured Notes pursuant to the Valuation Methodology unless directed otherwise by Senior Noteholders in accordance with the Indenture. The Trustee has not received any such direction from the Senior Noteholders.

A: A majority of the Senior Notes are not classified as "structured securities" and are simple interest bearing notes often referred to as "plain vanilla notes" in the market. The calculation of the amount due on these notes is relatively straightforward as there is no link to the performance of an underlying asset or group of assets.

A: On September 30, 2011, the Debtors filed an Objection (the "Objection") to the Global Proof of Claim seeking to reduce and allow the Global Proof of Claim to the aggregate amount of $48,783,940,671.27 (the "Reconciled Claim Amount"). The Debtors filed the Objection after "carefully reviewing their books and records" and "calculated reconciled claim amounts." Attached to the Objection as Exhibit A is a list including the allowed claim amounts for each CUSIP number included in the Global Proof of Claim. A copy of the Objection is available here.

The Debtors provided their proposed reconciliation to the Trustee and after a lengthy process of diligence and further reconciliations, both parties have agreed to the Reconciled Claim Amount. The Reconciled Claim Amount reflects the (1) elimination of certain amounts included in the Master List of Securities due to significant reductions in the principal amount outstanding on many of the Senior Notes since the initial issuances, or corrections to the current outstanding amounts; (2) adjustment of principal amounts and interest outstanding for certain Senior Notes resulting from calculations performed and reconciliations between LBHI, the Trustee and the Predecessor Trustee; and (3) determination of the allowed claim amounts for the LBHI Structured Notes pursuant to the Valuation Methodology.

The Trustee has requested that any order entered in connection with the Objection enjoin the holders of the LBHI Structured Notes from asserting claims against the Trustee arising from the negotiation of and consent to the reduction and allowance of the Global Proof of Claim as it relates to the LBHI Structured Notes. The deadline for filing responses to the Objection is November 14, 2011 at 4:00 p.m. (all times referenced are Prevailing Time of the Eastern Time Zone). The hearing to consider the Objection is scheduled for November 30, 2011 at 10:00 a.m. Senior Noteholders who oppose the relief sought in the Objection should consult with their own professionals regarding a response to the Objection or any other action.

A: Yes, Senior Noteholders have a right to vote. Pursuant to the Indenture, the Trustee is not authorized to vote on behalf of the Senior Noteholders. The Debtors are sending solicitation packages to creditors (including Senior Noteholders) which include ballots and instructions for voting. Completed ballots must be received by the Debtors by November 4, 2011 at 4 p.m.

The Debtors have provided information on voting on the "Solicitation Information" tab of their website at www.lehman-docket.com. Senior Noteholders should review the "Frequently Asked Questions" section of the "Solicitation Information" tab of the website before contacting the Debtors’ Voting Agent or the Trustee with questions.

If you do not receive a solicitation package, have questions regarding the ballot or require additional materials, PLEASE CONTACT THE DEBTORS’ VOTING AGENT, EPIQ BANKRUPTCY SOLUTIONS, LLC, at 1.866.879.0688 (domestic) or 1.503.597.7691 (international).

A: Thirty institutional creditors, representing over $100 billion in claims against the Debtors, have agreed to support the Debtors’ Third Amended Plan and have signed plan support agreements ("PSAs") with the Debtors. Those creditors who signed PSAs include substantially all of the proponents of the two alternative plans that were filed in the bankruptcy case earlier this year. The proponents of the alternative plans have agreed not to prosecute their plans while the Debtors seek confirmation of the Debtors’ Third Amended Plan.

The Trustee is a member of the Committee in the bankruptcy case. The Committee supports the Debtors’ Third Amended Plan and joins the Debtors in seeking its confirmation by the bankruptcy court. The solicitation package includes a letter from the Committee dated September 13, 2011 which states in part:

"THE COMMITTEE, WHICH REPRESENTS THE INTERESTS OF ALL UNSECURED CREDITORS OF THE DEBTORS, SUPPORTS THE PLAN AND RECOMMENDS THAT ALL HOLDERS OF UNSECURED CLAIMS VOTE TO ACCEPT THE PLAN IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH ON THE BALLOTS. Each creditor must, however, make its own independent decision as to whether the Plan is acceptable to that creditor before voting to accept or reject the Plan."

A: A hearing at which the bankruptcy court will consider confirmation (i.e., approval) of the Debtors’ Third Amended Plan is scheduled to commence on December 6, 2011 at 10:00 a.m. Any objections or responses to confirmation of the Debtors’ Third Amended Plan must be received by the Debtors by November 4, 2011 at 4 p.m.

A: Wilmington Trust does not directly hold any debt of Lehman Brothers and has no direct credit exposure to Lehman Brothers.

A: It is currently anticipated that payments made to Senior Noteholders will be made in the same manner LBHI made pre-bankruptcy payments on the Senior Notes. In the event of a payment on the Senior Notes, Wilmington Trust will issue a notice to Senior Noteholders describing the amount of the aggregate payment and a calculation of the amount payable per $1,000 in principal amount of the Senior Notes to allow Senior Noteholders to calculate their individual payments. Distributions will be made by Citibank as disbursing agent under the Indenture or such other entity appointed under the Debtors' Third Amended Plan.

A: The timing for distributions is currently unknown. Approval of a plan is a prerequisite for distributions. The Bankruptcy Court has not yet approved a plan. Wilmington Trust will provide further information on timing when such information becomes available.

A: In its capacity as Trustee, Wilmington Trust is unable to provide legal or financial advice to Senior Noteholders. Senior Noteholders should contact their own legal and financial advisors for advice regarding the Senior Notes and LBHI’s bankruptcy case.

A: Generally, no. When a Noteholder sells his or her notes, he or she generally no longer possesses a right to payment from the Debtors. If a Senior Noteholder is unsure whether or not he or she has retained a right payment, he or she should contact an attorney

A: Wilmington Trust recommends Senior Noteholders monitor the Committee website www.lehmancreditors.com for information regarding the bankruptcy case.

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