RE LEHMAN BROTHERS ASIA LTD (In Liquidation)

RE LEHMAN BROTHERS ASIA LTD (In Liquidation)

The court sanctioned each scheme because the statutory requirements were satisfied (proper notice, adequate explanatory statements, and statutory majorities voted in favour), a single class was justified by the creditors' common interest in avoiding expensive and uncertain litigation, and the scheme terms (including...

Source-derived case information.

Citation
RE LEHMAN BROTHERS ASIA LTD (In Liquidation)
Parties
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); Applicant / Proponent of Schemes: Joint and Several Liquidators (KPMG); Interested Party / Respondent: Lehman Brothers Holdings Inc
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 February 2017
Case Number
HCMP2265/2016
Procedural Posture
Scheme of Arrangement Under the Companies Ordinance (part 13 Division 2) / Sanction Hearing and Reasons for Decision (sanction Granted)
Outcome
Sanction of three schemes of arrangement for Lehman Brothers Asia Ltd, Lehman Brothers Futures Asia Ltd and Lehman Brothers Securities Asia Ltd (sanctioned 21 December 2016)
Legal Topics
Scheme of Arrangement, Post Liquidation Interest (pli), Priority of Claims, Non Provable Claims, Class Composition for Scheme Meetings, Companies Ordinance S673
Source Language
en
Insolvency Company Law Civil Procedure Scheme of Arrangement Post Liquidation Interest (pli) Priority of Claims Non Provable Claims Class Composition for Scheme Meetings +1 more

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Parties

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)

Joint and Several Liquidators (KPMG)

Applicant / Proponent of Schemes

Lehman Brothers Holdings Inc

Interested Party / Respondent

Procedural Posture

Scheme of Arrangement Under the Companies Ordinance (part 13 Division 2) / Sanction Hearing and Reasons for Decision (sanction Granted)

Legal Issues

  1. 1 Whether distributions should be treated interest-first or principal-first for PLI purposes
  2. 2 Whether PLI accrues to date of declaration or date of payment of distributions
  3. 3 Whether PLI is payable on contingent or future debts and on non-provable claims

Ratio Decidendi

The court sanctioned each scheme because the statutory requirements were satisfied (proper notice, adequate explanatory statements, and statutory majorities voted in favour), a single class was justified by the creditors' common interest in avoiding expensive and uncertain litigation, and the scheme terms (including specified PLI methodology and a 50% discount on non-provable claims) were ones that an intelligent and honest creditor could reasonably approve.

Court Disposition

Sanction of three schemes of arrangement for Lehman Brothers Asia Ltd, Lehman Brothers Futures Asia Ltd and Lehman Brothers Securities Asia Ltd (sanctioned 21 December 2016)

Orders

  • Sanctioned schemes of arrangement for Lehman Brothers Asia Limited, Lehman Brothers Futures Asia Limited and Lehman Brothers Securities Asia Limited
  • Approved explanatory statements and convening of single class meetings for each company (orders dated 6 September 2016 complied with)