Lehman Judge Overrules Objection From Asian Minibond Holders on Settlement

Lehman Judge Overrules Objection From Asian Minibond Holders on Settlement
By David McLaughlin and Linda Sandler - Apr 13, 2011 11:56 PM GMT+0800

Lehman Brothers Holdings Inc. (LEHMQ) won approval for a change in settling derivative transactions, defeating an objection from Asian investors who bought Lehman structured notes known as minibonds.

Hong Kong holders of $1.5 billion of the minibonds accused Lehman of trying to extract hundreds of millions of dollars from the minibond program, saying the procedures interfered with their dispute against Lehman and HSBC Holdings Plc, according to court documents.

About 43,000 Hong Kong investors bought an estimated $1.8 billion of the minibonds that were sold by lenders before New York-based Lehman filed for bankruptcy in 2008. Investors protested almost daily outside bank branches in Hong Kong, banging cymbals and blaring pre-recorded statements from bullhorns after they were offered repayments of at least 60 cents on the dollar in 2009.

PricewaterhouseCoopers LLC, Lehman’s receiver, said on March 27 the repayment offer was boosted so some minibond holders may receive 70 percent to 93 percent of their money back. Some investors want all their money refunded.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Linda Sandler in New York at lsandler@bloomberg.net; David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net