Lehman Minibond Holders Appeal Judge’s Ruling Affecting Their Recovery

Lehman Minibond Holders Appeal Judge’s Ruling Affecting Their Recovery
By Linda Sandler and David McLaughlin - Apr 29, 2011 12:53 AM GMT+0800

A group of investors in Lehman Brothers Holdings Inc. (LEHMQ) minibonds appealed a judge’s decision to let the defunct firm settle derivatives transactions in a way that affected their pursuit of getting more money for the bonds.

U.S. Bankruptcy Judge James Peck this month approved Lehman’s request to make the change, defeating an objection from Asian investors who bought Lehman structured notes known as minibonds. Ka Kin Wong and nine other investors said today in a filing that they appealed in U.S. District Court in Manhattan on behalf of a trust administered by HSBC Holdings Plc and themselves, “as well as all others similarly situated.”

About 43,000 Hong Kong investors bought an estimated $1.8 billion of the minibonds from various sellers 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 LLP, the receiver handling the minibond transactions, said on March 27 that 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