--- title: "LBHI's Chapter 11 case and the 2011 plan" language: en canonical: https://dossiertwist.com/dossiers/lehman-brothers-holdings/chapter-11/ as_of: 2026-10-14 keywords: ["Lehman Brothers Holdings","LBHI","Repo 105","Valukas examiner report","Ernst & Young","Chapter 11","Lehman Brothers Inc.","SIPA liquidation","Lehman Brothers Treasury Co.","Lehman Brothers Bankhaus","Lehman Brothers International (Europe)","Plan Trust","Alvarez & Marsal","Richard Fuld","Aurora Loan Services","BNC Mortgage","JPMorgan Chase","Barclays Capital","American Express","Lehman Brothers Special Financing"] --- # LBHI's Chapter 11 case and the 2011 plan **Question.** Which Lehman companies were in the Chapter 11 case, how did the 2011 plan settle their claims, and what changed when it took effect? **Answer.** Twenty-three Lehman companies, led by LBHI and including Lehman Brothers Special Financing and Lehman Commercial Paper, were debtors in the jointly administered case. The plan confirmed on December 6, 2011 kept them as separate estates but settled intercompany issues and allowed Lehman Brothers Treasury Co.'s claim against LBHI at $34.548 billion; bilateral settlements with foreign affiliates and others reduced claims against the debtors by more than $295 billion. It took effect on March 6, 2012, when LBHI's stock was cancelled and a single share issued to the Plan Trust; by June 2025 all the subsidiaries' cases had been closed. ## The debtors - Analysis: Lehman Brothers Special Financing Inc. (LBSF), a Delaware company at 745 Seventh Avenue, filed its petition on October 3, 2008 after a special board meeting; Bryan Marsal signed as chief restructuring officer, with Weil, Gotshal & Manges LLP as attorneys. Lehman Commercial Paper Inc. (LCPI) filed on October 5, 2008, its petition signed by David Coles as chief financial officer. Both schedules describe LBHI as the indirect parent, and a 2010 settlement agreement describes both as wholly owned subsidiaries of LBHI. LBSF's case was closed by final decree on July 1, 2021 and LCPI's on May 4, 2020. [src-028] [src-040] [src-030] [src-096] - Analysis: The confirmation order lists 23 debtors: LBHI, LB 745 LLC, PAMI Statler Arms LLC, Lehman Brothers Commodity Services Inc., LBSF, Lehman Brothers OTC Derivatives Inc., Lehman Brothers Derivative Products Inc., LCPI, Lehman Brothers Commercial Corporation, Lehman Brothers Financial Products, Inc., Lehman Scottish Finance L.P., three CES Aviation companies, East Dover Limited, Luxembourg Residential Properties Loan Finance S.a.r.l., BNC Mortgage LLC, Structured Asset Securities Corporation and five real-estate holding companies. By June 30, 2025 every case except LBHI's had been closed by final decree, among them those of Lehman Brothers Commodity Services and Lehman Brothers Commercial Corporation on February 11, 2019 and Lehman Brothers OTC Derivatives on May 4, 2020. [src-021] [src-040] [src-029] ## Managing the estate - Analysis: According to a September 2010 law-firm summary, Bryan Marsal, co-chief executive of Alvarez & Marsal and LBHI's chief restructuring officer, presented A&M's State of the Estate report on September 22, 2010: about $1.2 trillion of general unsecured claims had first been filed against the debtors, adjusted outstanding claims stood at $464 billion, allowed claims were estimated at $365 billion and assets available for distribution at $57.5 billion. [src-067] ## The plan - Analysis: On December 6, 2011 Bankruptcy Judge James M. Peck confirmed the Modified Third Amended Joint Chapter 11 Plan. It consists of 23 separate plans, one per debtor, does not substantively consolidate the debtors and has 161 classes of claims and interests, 17 of them against LBHI; creditors asserting about $400 billion of claims accepted it, 95% in number and 98.68% in amount of those voting. Its proponents included an ad hoc group of creditors and a group of banks and investment firms that included Goldman Sachs entities, Morgan Stanley & Co. International, Deutsche Bank AG and Credit Suisse International. [src-002] [src-102] [src-021] - Analysis: The order describes the plan as an integrated settlement, including of whether the debtors should be substantively consolidated: LBHI receives distributions on only 80% of its intercompany funding claims against the subsidiary debtors, the first $100 million distributed to LBHI on its claims against LBSF and LCPI goes to those subsidiaries' general unsecured creditors, and the intercompany claim of Lehman Brothers Treasury Co. B.V. against LBHI is allowed at $34.548 billion. Under the order's schedule of claims of debtor-controlled entities, LB Re Financing No. 2 Limited received an allowed claim of $6,761,074,231 against LBHI; separately, under the Debtor Allocation Agreement, LBSF has an allowed administrative expense claim of $300 million against LBHI. According to LBHI's report on the plan, the Racers 2007-A Trust would have allowed claims of $1,947,735,000 against LBSF, $5 billion against LCPI and a guarantee claim of $1,947,735,000 against LBHI, and LBHI's Fenway-related claims against LCPI would be allowed at $230 million. [src-021] [src-102] - Analysis: On November 23, 2011 LBHI and LCPI also settled with Deutsche Bank AG and investment firms holding participations in Claims Nos. 59006 and 58233; the settlement with Deutsche Bank takes into account the relative strengths of the arguments over the classification of certain claims and the interpretation of the agreements under which they were settled. [src-102] [src-021] ## Foreign affiliates - Analysis: Insolvency or liquidation proceedings were opened for 80 of the debtors' foreign affiliates in 16 jurisdictions following LBHI's filing on September 15, 2008. Many asserted guarantee claims against LBHI, whose enforceability LBHI challenged. The debtors settled with Lehman Brothers Bankhaus AG, Lehman Brothers Treasury Co. B.V., Lehman Brothers Securities N.V., Lehman Brothers International (Europe) and the U.K., Luxembourg, Hong Kong, Singapore and Japanese Lehman entities, and with Deutsche Bundesbank, the German banks' association and deposit-protection scheme and Deutsche Bank; the settlements allowed their claims well below the amounts asserted and reduced claims against the debtors by more than $295 billion. [src-021] ## Litigation left open - Analysis: The confirmation order does not prevent the lead plaintiffs in the equity/debt and mortgage-backed securities class actions from asking the court for leave to pursue their claims against the debtors solely to collect from available insurance proceeds, with the debtors free to object, and it preserves the rights of the debtors, the SIPA trustee of Lehman Brothers Inc., Barclays Bank PLC and Barclays Capital Inc. in disputes over the Barclays sale order. A federal court publication lists adversary proceeding 10-3547, in which LBSF sued Bank of America, Bank of New York Corporate Trustee Services, Citibank, U.S. Bank and Wells Fargo together with issuers and co-issuers of collateralised debt obligation series, with an opinion published on June 28, 2016; the publication gives neither the subject of the claims nor the result. [src-021] [src-124] ## The effective date - Analysis: The plan became effective on March 6, 2012. All LBHI common and preferred stock was cancelled and one new share, representing all of LBHI's capital stock, was issued to the Lehman Brothers Holdings Inc. Plan Trust for the benefit of the former stockholders, who received only non-transferable interests in the trust; because creditors must be paid in full first, LBHI does not expect them to receive anything. LBHI filed Form 15 the same day to end the registration of its equity securities. After the effective date the boards of LBSF and LCPI each have three directors, two of them serving LBHI directors and a third independent of LBHI, and every other subsidiary debtor has a single director from LBHI's board. [src-002] [src-021] ## Sources - [src-028] Court record source · src-028 - [src-040] LBHI quarterly financial report as of June 30, 2025, Exhibit 99.1 to the Plan Trust Form 8-K, U.S. Securities and Exchange Commission (EDGAR), 2025-08-28 - [src-030] Court record source · src-030 - [src-096] Settlement agreement among LBHI, Aurora Bank FSB and others, Exhibit 99.1 (2010), U.S. Securities and Exchange Commission (EDGAR), 2010 - [src-021] Court record source · src-021 - [src-029] Court record source · src-029 - [src-067] Media source · src-067 - [src-002] Lehman Brothers Holdings Inc. Form 8-K (event date March 6, 2012; filed March 12, 2012), U.S. Securities and Exchange Commission (EDGAR), 2012-03-12 - [src-102] Lehman Brothers Holdings Inc. Form 8-K of December 6, 2011 on plan confirmation, U.S. Securities and Exchange Commission (EDGAR), 2011-12-06 - [src-124] Court publication: Lehman Brothers Special Financing Inc. v. Bank of America National Association et al. (10-3547), U.S. Government Publishing Office (GovInfo), 2016-06-28