RE LEHMAN BROTHERS FUTURES ASIA LTD (In Liquidation)

RE LEHMAN BROTHERS FUTURES ASIA LTD (In Liquidation)

The court sanctioned the three Schemes because the statutory requirements were met: proper procedure and notice, explanatory statements sufficiently explained complex issues, the single classes were properly constituted given creditors' common commercial interest in avoiding litigation, and each Scheme obtained the requisite majorities; accordingly the compromise was one a reasonable creditor could accept to resolve PLI, non-provable claim and priority uncertainties and to expedite distributions.

Citation
RE LEHMAN BROTHERS FUTURES ASIA LTD (In Liquidation)
Parties
Applicant (joint Liquidators): Joint and several liquidators of Lehman Brothers Asia Limited, Lehman Brothers Futures Asia Limited and Lehman Brothers Securities Asia Limited; Scheme Company (in Liquidation): Lehman Brothers Asia Limited (In Liquidation); Scheme Company (in Liquidation): Lehman Brothers Futures Asia Limited (In Liquidation); Scheme Company (in Liquidation): Lehman Brothers Securities Asia Limited (In Liquidation); Interested Party / Ultimate Holding Company: Lehman Brothers Holdings Inc
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 February 2017
Case Number
HCMP2264/2016
Procedural Posture
Scheme of Arrangement Under Companies Ordinance Part 13 Division 2 / Sanction Hearing / Final Sanction (schemes Sanctioned 21 December 2016)
Outcome
Sanctioned: the Court sanctioned the schemes of arrangement for Lehman Brothers Asia Limited, Lehman Brothers Futures Asia Limited and Lehman Brothers Securities Asia Limited
Legal Topics
Scheme of Arrangement, Post Liquidation Interest (pli), Priority of Claims, Non Provable Claims, Class Composition and Voting
Source Language
EN
Company Law Insolvency Law Civil Procedure Scheme of Arrangement Post Liquidation Interest (pli) Priority of Claims Non Provable Claims Class Composition and Voting

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Parties

Joint and several liquidators of Lehman Brothers Asia Limited, Lehman Brothers Futures Asia Limited and Lehman Brothers Securities Asia Limited

Applicant (joint Liquidators)

Lehman Brothers Asia Limited (In Liquidation)

Scheme Company (in Liquidation)

Lehman Brothers Futures Asia Limited (In Liquidation)

Scheme Company (in Liquidation)

Lehman Brothers Securities Asia Limited (In Liquidation)

Scheme Company (in Liquidation)

Lehman Brothers Holdings Inc

Interested Party / Ultimate Holding Company

Procedural Posture

Scheme of Arrangement Under Companies Ordinance Part 13 Division 2 / Sanction Hearing / Final Sanction (schemes Sanctioned 21 December 2016)

Legal Issues

  1. 1 Whether statutory requirements for sanctioning a scheme under the Companies Ordinance were satisfied
  2. 2 Whether classes of creditors were properly constituted for voting
  3. 3 How post-liquidation interest (PLI) entitlements should be determined (interest-first v principal-first; accrual date; PLI on contingent/future debts)

Ratio Decidendi

The court sanctioned the three Schemes because the statutory requirements were met: proper procedure and notice, explanatory statements sufficiently explained complex issues, the single classes were properly constituted given creditors' common commercial interest in avoiding litigation, and each Scheme obtained the requisite majorities; accordingly the compromise was one a reasonable creditor could accept to resolve PLI, non-provable claim and priority uncertainties and to expedite distributions.

Court Disposition

Sanctioned: the Court sanctioned the schemes of arrangement for Lehman Brothers Asia Limited, Lehman Brothers Futures Asia Limited and Lehman Brothers Securities Asia Limited

Orders

  • Schemes of arrangement for LB Asia, LB Futures and LB Securities sanctioned and approved by the Court (sanction date 21 December 2016)
  • Explanatory statements and procedural directions validated; statutory meeting results accepted as satisfying s674(1)(a)