Lehman retrieves $60bn for creditors

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EDITOR’S NOTE: We are seeing more and more of these “recoveries.” The question we pose and that should be posed IN COURT is to whom this money is paid and more importantly, how is it going to be credited? Why is that important?

ANSWER: If that recovery means that the investors or investor pools recovered money then the obligations to those investors have been mitigated or reduced. Those obligations derived from liabilities that were represented to be principally from borrowers who had taken loans on their homes. If the obligations are reduced, then there should be a credit. That credit should be reported to the borrower but it isn’t. We continue this charade everyday with past, present and future foreclosures claiming amounts due that are overstated. In fact, many if not most of these foreclosures are relying upon the existence of a default that either never happened or was cured by these “recoveries.”

The simple fact is that a default does NOT occur because the named borrower fails to make a payment. The default actually occurs ONLY if the creditor fails to receive payment from ANY source. Think about it.

In commercial transactions, if the creditor has successfully mitigated the obligation without payment from the borrower, the obligation is still obviously reduced since the creditor is not entitled to recover more than the amount that is due. So why are we allowing the creditors and pretender lenders to recover multiples of the amount due in residential home foreclosures?

Note that this effects all Lehman entities which include notably Aurora Loan Servicing, BNC and dozens of other entities.

Lehman retrieves $60bn for creditors

By Telis Demos in New York

Published: September 22 2010 20:58 | Last updated: September 22 2010 20:58

The bankrupt estate of Lehman Brothers has recovered nearly $60bn in value for creditors since September 2008, but a decision on how to distribute the funds will not be finalised until next year at the earliest.

Bryan Marsal, a partner with restructuring firm Alvarez & Marsal and serving as Lehman’s chief executive, presented the bank’s “state of the estate” report in a Manhattan bankruptcy court on Wednesday.

Tags: accounting, Aurora Loan Services, BNC, creditors, Lehman
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