Judge Sets September 22, 2009 Bar Date for Lehman Claims, Requires Questionnaires for Derivatives Claims - Teigland-Hunt LLP Client Alert
As noted in our alert of June 14, 2009, Lehman Brothers Holdings Inc. and its affiliated debtors (collectively, the “Debtors”) filed a motion in late May to establish a deadline for filing proof of claim forms in the Debtors’ chapter 11 bankruptcy proceedings (“Bar Date Motion”). As part of this motion, the Debtors sought to require detailed claims questionnaires and extensive supporting documentation for claims related to derivative transactions. A wide cross-section of claimants objected to the Bar Date Motion citing unnecessary and onerous filing requirements. At a hearing on the motion on June 24th, Judge James Peck noted that the Bar Date Motion produced more objections than any other single action in the Lehman chapter 11 proceedings to date and recommended that a group of creditors meet with the Debtors in order to reach a fair compromise.
To this end the Debtors’ hosted an unusual ad hoc meeting on June 26th with a group of creditors from approximately 30 institutions that together represented over 50% of the derivatives transactions in question. The meeting focused on objections relating to the proposed questionnaires and resulted in a revised form of the Bar Date Motion that was unanimously approved by the ad hoc group. At a hearing on the revised motion on June 29th, Judge Peck indicated that he was satisfied that the revised procedures represented a fair balance between the burdens imposed on the creditors and the benefits to managing a case of this complexity.
An order granting the revised Bar Date Motion (“Bar Date Order”) and setting a bar date of September 22, 2009 was issued on July 2nd. The deadline for the completion and submission of questionnaires related to derivative claims is extended an additional 30 days beyond the Bar Date to October 22, 2009. In summary the Bar Date Order provides that holders of claims against the Debtors based on derivatives contracts are required to:
• Complete and return a paper copy of the approved proof of claim form indicating that such claim is based on a “Derivative Contract”;
• Complete and submit the “Derivatives Questionnaire” online (at www.lehman-claims.com);
• Upload specified supporting documentation online;
• If claims were guaranteed, complete and submit the “Guarantee Questionnaire” online.
The Bar Date Order clarifies several issues that were raised by creditors in their objections. For example, the Bar Date Order specifies which transactions constitute “Derivative Contracts” subject to the requirements of the Derivatives Questionnaire. It also provides that a creditor that submitted a valid proof of claim prior to entry of the Bar Date Order will not have to re-file; however, it will be required to submit a Derivatives Questionnaire and Guarantee Questionnaire if applicable. In addition the Bar Date Order provides as follows:
• Trustees may file Proof of Claim forms on behalf of their customers;
• Information submitted on the Lehman claims website in respect of derivative contracts and guarantees will not be publicly accessible;
• It is not necessary to submit confirmations to evidence transactions or evidence of delivery of valuation statements;
• The documentation required to support the trade valuation methodology applied during the close-out process and the valuation of collateral is limited in scope relative to the original Lehman motion.
If you have any further questions regarding the Lehman proceedings, please feel free to contact Lauren Teigland-Hunt at (212) 269-1002 or GuyLaine Charles at (212) 269-1016.