LEHMAN BROTHERS FINANCE AG, 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.

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.

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.

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.

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".

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.

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.