Lehman Brothers Finance AG – In liquidation

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On 29th October 2008 the Swiss Financial Market Supervisory Authority (FINMA) ordered Lehman Brothers Finance AG to be liquidated, on 22nd December 2008 bankruptcy was ordered. PricewaterhouseCoopers as appointed bankruptcy liquidators are undertaking proceedings to:

  • assert control over the assets of Lehman Brothers Finance AG
  • recover cash on deposits or investments – implement a mechanism for the return of assets
  • mandate law firms to safeguard companies interests
  • form policies for handling of pending and failed trades
  • identify and value derivative contracts
  • ensure appropriate human resources and local infrastructure
  • communicate with creditors

Lehman Brothers Finance AG (LBF) is a 100% subsidiary of Lehman Brothers Holdings Inc. which filed for Chapter 11 on 15th September 2008. LBF's principle business was the execution of tailor made OTC equity derivatives transactions for institutional clients.

Appointment of a Creditors' Committee

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In order to allow creditors of Lehman Brothers Finance AG in Liquidation to actively monitor and participate in the liquidation proceedings, the liquidator suggested, after consultation with the Swiss Financial Market Supervisory Authority (FINMA), to appoint a Creditors' Committee.

Based on discussions with FINMA, the liquidator envisaged a Creditors' Committee made up of the four groups of creditors indicated below, with each group having one to three representatives:

Lehman Group Companies number of representatives 2
Other creditor banks1 number of representatives 3
Additional non-privileged institutional creditors2 number of representatives 1
Additional privileged creditors number of representatives 1

1 All creditors included in this group are, based on the best information available to us, believed to hold a form of general banking licence. Creditors are requested to inform us accordingly if they do not hold any such licence.
2 Including owners of securities emitted by LBF and high net worth individuals.


Pursuant to the rules of the Creditors' Committee reviewed by FINMA, the Creditors' Committee will have the following responsibilities:

  1. Decision of issues submitted to the Creditors' Committee for decision or consultative vote by the liquidator;
  2. Decision about claims according to art. 18 para. 2 of the Swiss Ordinance on the Bankruptcy of Banks;
  3. Decision about the scheduling of claims (in particular complex claims) submitted to the Creditors' Committee by the liquidator.

With publication of April 17, 2009, FINMA has set a deadline until May 4, 2009, for the creditors to put forward their suggestion for the representative/representatives of their group of creditors.

The following people are representing the LBF creditors in the Creditors' Committee:
- Lehman Group Companies: Eric Buis, Daniel Staehelin
- Other creditor Banks: Tanja Luginbühl, Max Roesle, Eric Stupp
- Additional non-privileged institutional creditors: Martin Hess
- Additional privileged creditors: Peter Hafner

Contact details for creditors

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Claims are to be submitted in written form to:

Lehman Brothers Finance AG in Liquidation
c/o PricewaterhouseCoopers AG
Birchstrasse 160 
8050 Zürich 
Switzerland

Claims already filed with Lehman Brothers Finance AG following the call for creditors in the Schweizerische Handelsamtsblatt (3rd publication: 20th November 2008) are valid. These claims do not have to be filed again. The liquidators request to only file claims which have not been filed with Lehman Brothers Finance AG so far.

To ensure that claims to Lehman Brothers Finance AG are dealt with in the most effective manner, please include the following information and documentation in your letter:

  • Name/Company name;
  • Entity to which the claim pertains;
  • Any relevant event or expiry dates;
  • Full details of each transaction (e.g. Global ID, estimated value, product type, account number, etc.)
  • Full contact details

Once you have submitted your claim it will be dealt with by the relevant team. We kindly ask that you wait to be contacted by this team.

Please be aware that exclusively claims against Lehman Brothers Finance AG will be dealt with. Claims towards any other entity of the Lehman Brothers group will neither be handled by the liquidators of Lehman Brothers Finance AG nor will they be forwarded to the relevant company. 

For submitting a query to the liquidators, please see the "Contact details for enqueries".

Contact details for enquiries

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Prior to submitting a query regarding Lehman Brothers Finance AG, please see the Frequently Asked Questions section as the information that you require may be there
Whilst we will respond to all enqueries as soon as we can, please keep an eye on this website as we will be updating it with information as and when it becomes available.
Please be aware that enquiries regarding any other entity of Lehman Brothers group will not be handled by the liquidators of Lehman Brothers Finance AG.

What should I do if I have a enquiry?
If your enquiry is not answered by the information given on this web page, please address your enquiry to:

This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Your queries regarding Lehman Brothers Finance can only be dealt with if you include all of the following information and documentation in your text:

  • Name/Company name;
  • Entity to which the enquiry pertains;
  • Any relevant event or expiry dates;
  • If this relates to specific transactions, please include full details of each transaction (e.g. estimated value, product type, account number, etc.);
  • Full contact details.

What do I do once I have submitted my enquiry?
Once you have submitted your enquiry, the relevant team will deal with it. We kindly ask you to wait until the team gets in touch with you.

Frequently Asked Questions

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1. What happened to Lehman Brothers and what is PricewaterhouseCoopers’ involvement?

After an attempt to find a private buyer failed, Lehman Brothers Holding Incorporated (the parent company of Lehman Brothers Finance) filed for bankruptcy in the US courts on 15 September. Accordingly, on 29 October Lehman Brothers Finance AG Zurich, was put into liquidation. PricewaterhouseCoopers AG, Zurich was appointed as liquidators for the Lehman Brothers entity
 

2. Which Lehman Brothers companies are in liquidation?

There are many subsidiary companies within the Lehman Brothers group which are either asset owning or dormant companies. Their future will be decided in the coming weeks and months. Some of these have already been placed into administration.
 

3. What is the role of the liquidators?

The liquidator is fully responsible to the Swiss Financial Market Supervisory Authority (FINMA). Once PricewaterhouseCoopers AG Zurich was appointed as liquidators, it took over a fiduciary responsibility to wind down business operations by protecting and realising the assets for the benefits of all creditors. Accordingly, the key objectives of the liquidators are to maximise the values of assets and realise this for the benefit of all creditors. No individual creditor or group of creditors can be preferred in any way. All creditors have to be treated equally.
 

4. What are the guiding principles of liquidation?

The liquidators have to act under the following guiding principles:
  • Each legal entity must be treated separately. The liquidators will only convey whatever right, title and interest Lehman Brothers Finance has over the asset.
  • Creditors of the same type or class (e.g. unsecured) must be dealt with on a pari passu or equal basis.
Assets and liabilities which are not owned by Lehman Brothers Finance AG Zurich do not form part of the insolvent estates. The liquidators, therefore, need to determine the status of all assets and liabilities. Where assets are held in trust the liquidators may deal with them (e.g. return them to the owner). However the liquidators need to ensure that creditors in the same class are not disadvantaged; liquidators may insist that the costs of dealing with this are borne by the owner and not by the rest of the estate.
 

5. What is particularly difficult about the Lehman Brothers situation?

Lehman Brothers was a very significant and complex global organisation, operating in multiple territories and across most areas of financial services. Its collapse also coincided with a period of unprecedented turmoil in financial markets. The US operations of Lehman Brothers and the European Lehman Brothers’ entities are now being dealt with through separate legal procedures, and it is as if they are no longer part of the same group. This has significant practical consequences for the liquidators in meeting their objectives. As with most global financial services organisations, on a day to day basis Lehman Brothers was previously managed and run mainly along global product lines. Following Lehman Brothers’ bankruptcy in the US, and the European Lehman entities being placed into insolvency proceedings, a legal entity focus is now paramount and all information relating to the group’s activities now has to be captured and assessed on a legal entity basis instead. Funding and other interdependencies existed between the US and various European Lehman Brothers’ entities; these links are now broken. These factors add further complexity to the liquidation. The sale of the North American investment banking and capital markets business of Lehman Brothers to Barclays also complicates the situation faced by the liquidators.
 

6. How do creditors register a claim or ask the liquidators a question, or both?

To register a claim, please see the "Contact details for creditors".
To submit a query to the liquidators, please see the "Contact details for queries".
 

7. Is Lehman Brothers Finance S.A. the same entity as Lehman Brothers Finance AG?

Yes, Lehman Brothers Finance S.A. and Lehman Brothers Finance AG are one and the same entity. The abbreviation S.A. stands for société anonyme, the french designation for the German Aktiengesellschaft, which is abbreviated AG. French and German are official languages in Switzerland therefore the terms S.A. and AG are both used for companies with limited liability.
 

8. Can a creditor charge interest on outstanding claims against Lehman Brothers Finance AG?

In principle, the creditors of Lehman Brothers Finance AG can submit claims including interest. Interest owed by Lehman Brothers Finance AG ceased on the commencement of bankruptcy proceedings, 22 December 2008.

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