# EDGAR Filing Document

**Accession Number:** 0000806085
**File Stem:** 0001193125-23-085723
**Filing Date:** 2023-3
**Character Count:** 56209
**Document Hash:** 0358b3fb787660fea42911443135cfeb
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-085723.hdr.sgml**: 20230330

**ACCESSION NUMBER**: 0001193125-23-085723

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20230330

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230330

**DATE AS OF CHANGE**: 20230330

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LEHMAN BROTHERS HOLDINGS INC. PLAN TRUST
- **CENTRAL INDEX KEY:** 0000806085
- **STANDARD INDUSTRIAL CLASSIFICATION:** SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
- **IRS NUMBER:** 306315144
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-09466
- **FILM NUMBER:** 23781423

**BUSINESS ADDRESS:**
- **STREET 1:** 1271 AVENUE OF THE AMERICAS
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10020
- **BUSINESS PHONE:** 646 285-9000

**MAIL ADDRESS:**
- **STREET 1:** 1271 AVENUE OF THE AMERICAS
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10020

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LEHMAN BROTHERS HOLDINGS INC
- **DATE OF NAME CHANGE:** 19930917

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SHEARSON LEHMAN HUTTON HOLDINGS INC
- **DATE OF NAME CHANGE:** 19901017

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

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**FORM 8-K** 

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**CURRENT REPORT** 

**Pursuant to Section 13 or 15(d) of** 

**The Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported): March 30, 2023** 

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## LEHMAN BROTHERS HOLDINGS INC. PLAN TRUST
**(Exact name of registrant as specified in its charter)** 

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| | | |
|:---|:---|:---|
| **Delaware** | **1-9466** | **30-6315144** |
| **(State or other jurisdiction**<br> **Of incorporation)** | **(Commission**<br> **File Number)** | **(IRS Employer**<br> **Identification No.)** |

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**110 East 42<sup>nd</sup> Street** 

**New York, New York** 

**10017** 

**(Address of Principal Executive Offices) (Zip Code)** 

**Registrant's telephone number, including area code: (646) 285-9000** 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br> **Symbol(s)** | **Name of each exchange**<br> **on which registered** |
| Not Applicaple | Not Applicaple | Not Applicaple |

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Indicate by the check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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| | |
|:---|:---|
| **ITEM 7.01** | **Regulation FD Disclosure.**  |

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As previously disclosed, on September 15, 2008, Lehman Brothers Holdings Inc. ("LBHI") filed a voluntary petition for relief under Chapter 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). Together with the Chapter 11 cases thereafter filed by certain subsidiaries (collectively with LBHI, the "Debtors"), the cases are being jointly administered under the case caption *In re Lehman Brothers Holdings Inc., et. al*., Case Number 08-13555 (the "Chapter 11 Proceeding") pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure. On March 6, 2012, the Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and its Affiliated Debtors (the "Plan") became effective.

As contemplated under the Plan, on March 30, 2023, LBHI, the Plan Administrator, filed the Quarterly Financial Report as of December 31, 2022, which includes Balance Sheets, and Cash Flow Estimates (collectively, the "Quarterly Financial Report") of LBHI and Debtor-Controlled Entities (collectively, the "Company") with the Bankruptcy Court. A copy of the court filing is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K.

*Limitation on Incorporation by Reference* 

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

*Cautionary Statements Regarding Financial and Operating Data* 

The Company cautions the reader not to place undue reliance upon the information contained in the Quarterly Financial Report, as it is not prepared for the purpose of providing the basis for an investment decision directly or indirectly relating to the Company or any of its securities. The Quarterly Financial Report is not prepared in accordance with U.S. generally accepted accounting principles, is not audited or reviewed by independent accountants, will not be subject to audit or review by external auditors at any time in the future, is in a format consistent with applicable bankruptcy laws, and is subject to future adjustments and reconciliations. There can be no assurances that the Quarterly Financial Report is accurate or complete. The Quarterly Financial Report contains a further description of limitations on the information contained therein. The Quarterly Financial Report also contains information which might not be indicative of the Company's financial condition. Results set forth in the Quarterly Financial Report should not be viewed as indicative of future results.

*Cautionary Statement Regarding Forward-Looking Statements* 

This Current Report on Form 8-K and Exhibit 99.1 hereto may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Company's financial condition, results of operations, and business that is not historical information. Forward-looking statements reflect the Company's current views with respect to future events as well as various estimates, assumptions and comparisons based on available information up to the date of this report, many of which are subject to risks and uncertainties. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including all statements regarding information regarding the intent, belief or current expectation of the Company and members of its management. The words "believe," "expect," "plan," "intend," "estimate," or "anticipate" and similar

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expressions, as well as future or conditional verbs such as "will," "should," "would," and "could," often identify forward-looking statements. These statements speak only as of the date hereof and involve known and unknown risks, uncertainties and other factors, including factors which are outside the Company's control, which may cause the Company's actual condition, results, performance or achievements to be materially different from any future condition, results, performance or achievements expressed or implied by these forward-looking statements. Such factors include, without limitation, the potential adverse impact of the Chapter 11 Proceeding on the Company's liquidity or results of operations. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, but reserves the right to do so. Readers of this report should not place undue reliance on these forward-looking statements.

The Company's informational filings with the Bankruptcy Court, including the Quarterly Financial Report included in Exhibit 99.1, are available to the public at the office of the Clerk of the Bankruptcy Court, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004-1408. Such informational filings may be available electronically, for a fee, through the Bankruptcy Court's Internet world wide web site (<u>www.nysb.uscourts.gov</u>), and/or free of cost, at a world wide web site maintained by the Company's Bankruptcy Court-approved noticing agent (www.lehman-docket.com).

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| | |
|:---|:---|
| **ITEM 9.01** | **Financial Statements and Exhibits.**  |

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(d) Exhibits

99. 1 [Quarterly Financial Report as of December 31, 2022 which includes Balance Sheets, and Cash Flow Estimates of Lehman Brothers Holdings Inc. and Debtor-Controlled Entities](d473848dex991.htm)

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**SIGNATURES** 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Lehman Brothers Holdings Inc. Plan Trust has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **LEHMAN BROTHERS HOLDINGS INC. PLAN TRUST** | **LEHMAN BROTHERS HOLDINGS INC. PLAN TRUST** |
|  | By Lehman Brothers Holdings Inc. as Plan Administrator | By Lehman Brothers Holdings Inc. as Plan Administrator |
| Date: March 30, 2023 | By: | */s/ Jeffry Ciongoli*  |
|  | Name: | Jeffry Ciongoli |
|  | Title: | Senior Vice President and Co-Treasurer |

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## Exhibit 99.1

**Exhibit 99.1** 

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

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| | |
|:---|:---|
| In re: |  |
|  | Chapter 11 Case No. |
| **Lehman Brothers Holdings Inc., et al.,** | 08-13555 |
|  | Jointly Administered |
| Debtors. |  |

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**QUARTERLY FINANCIAL REPORT** 

AS OF DECEMBER 31, 2022

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| | |
|:---|:---|
| DEBTORS' ADDRESS: | LEHMAN BROTHERS HOLDINGS INC. |
|  | c/o ROSE HAUZENBERG |
|  | 110 EAST 42<sup>ND</sup> STREET |
|  | SUITE 820 |
|  | NEW YORK, NY 10017 |
| DEBTORS' ATTORNEYS: | WEIL, GOTSHAL & MANGES LLP |
|  | c/o GARRETT A. FAIL |
|  | 767 FIFTH AVENUE |
|  | NEW YORK, NY 10153 |
| REPORT PREPARER: | LEHMAN BROTHERS HOLDINGS INC., AS PLAN ADMINISTRATOR |

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Date: March 30, 2023

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**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

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**Table of Contents** 

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| | | | | |
|:---|:---|:---|:---|:---|
| I. | Schedule of Debtors |  | 3 |  |
| II. | Cash Flow Estimates |  | 4 |  |
| III. | Notes to the Cash Flow Estimates |  | 6 |  |
|  | *Note 1 - Basis of Presentation* | | *6* | |
|  | *Note 2 - Due from Non-Controlled Affiliates* | | *9* | |
|  | *Note 3 - Due to LBHI from LBHI-Controlled Affiliates* | | *12* | |
|  | *Note 4 – Legal Proceedings* | | *13* | |
|  | *Note 5 – Taxes Payable* | | *16* | |
|  | *Note 6 – Subsequent Events* | | *17* | |
| IV. | Balance Sheets |  | 18 |  |

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***QUESTIONS***

The Company has established an email address to receive questions from readers regarding this presentation and its other financial disclosures. The Company plans to review questions received, and for those subjects which the Company determines a response would not (i) violate a confidentiality provision, (ii) place the Company in a competitive or negotiation disadvantage, or (iii) be unduly burdensome relative to the value of information requested, the Company shall endeavor to post a response on the website listed below (maintaining the anonymity of the originators of the questions). The Company assumes no obligation to respond to email inquiries.

**Please email questions, with document references as relevant, to:** 

**<u>QUESTIONS@lehmanholdings.com</u>**

**The Company's previously posted responses can be found on the Epiq website maintained for the Company:** 

**<u>www.lehman-docket.com</u> under the Key Documents tab and the Responses to Questions Submitted category** 

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**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

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**I.** **Schedule of Debtors** 

The twenty-three entities listed below (the "<u>Debtors</u>") filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York (the "<u>Bankruptcy Court</u>") on the dates indicated below. On December 6, 2011, the Bankruptcy Court confirmed the Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and its Affiliated Debtors (the "<u>Plan</u>"). On March 6, 2012, the "<u>Effective Date</u>" (as defined in the Plan) occurred. As of the date hereof, the following Debtor's chapter 11 case remains open:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Case No.** | **Case No.** | **Date Filed**<br>**("<u>Commencement<br>Date</u>")** | **Date Filed**<br>**("<u>Commencement<br>Date</u>")** |
|  Lehman Brothers Holdings Inc. ("LBHI") |  | 08-13555 |  | 09/15/2008 |

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The following Debtors' chapter 11 cases were closed pursuant to final decrees entered by the Bankruptcy Court (Docket No. 51920, No. 54163, No. 58257, No. 59472, No. 60623, and No. 61162):

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| | | | |
|:---|:---|:---|:---|
|  | **Case No.** | **Date Filed** | **Date Closed** |
|  LB 745 LLC | 08-13600 | 09/16/2008 | 01/28/2016 |
|  PAMI Statler Arms LLC | 08-13664 | 09/23/2008 | 01/28/2016 |
|  CES Aviation LLC | 08-13905 | 10/05/2008 | 01/28/2016 |
|  CES Aviation V LLC | 08-13906 | 10/05/2008 | 01/28/2016 |
|  CES Aviation IX LLC | 08-13907 | 10/05/2008 | 01/28/2016 |
|  LB 2080 Kalakaua Owners LLC | 09-12516 | 04/23/2009 | 01/28/2016 |
|  LB Somerset LLC | 09-17503 | 12/22/2009 | 01/28/2016 |
|  LB Preferred Somerset LLC | 09-17505 | 12/22/2009 | 01/28/2016 |
|  East Dover Limited | 08-13908 | 10/05/2008 | 12/15/2016 |
|  Luxembourg Residential Properties Loan Finance S.a.r.l. | 09-10108 | 01/07/2009 | 12/15/2016 |
|  Merit LLC | 09-17331 | 12/14/2009 | 12/15/2016 |
|  Lehman Brothers Derivative Products Inc. ("LBDP") | 08-13899 | 10/05/2008 | 06/14/2018 |
|  Lehman Brothers Financial Products Inc. ("LBFP") | 08-13902 | 10/05/2008 | 06/14/2018 |
|  Lehman Scottish Finance L.P. | 08-13904 | 10/05/2008 | 06/14/2018 |
|  LB Rose Ranch LLC | 09-10560 | 02/09/2009 | 06/14/2018 |
|  Lehman Brothers Commodity Services Inc. ("LBCS") | 08-13902 | 10/03/2008 | 02/11/2019 |
|  Lehman Brothers Commercial Corporation ("LBCC") | 08-13901 | 10/05/2008 | 02/11/2019 |
|  Structured Asset Securities Corporation | 09-10558 | 02/09/2009 | 02/11/2019 |
|  Lehman Brothers OTC Derivatives Inc. ("LOTC") | 08-13893 | 10/03/2008 | 05/04/2020 |
|  Lehman Brothers Commercial Paper Inc. ("LCPI") | 08-13900 | 10/05/2008 | 05/04/2020 |
|  BNC Mortgage LLC | 09-10137 | 01/09/2009 | 05/04/2020 |
|  Lehman Brothers Special Financing Inc. ("LBSF") | 08-13888 | 10/03/2008 | 07/01/2021 |

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**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

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**II.** **Cash Flow Estimates** 

Lehman Brothers Holdings Inc. & LBHI-Controlled Affiliates

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *($ in millions)* |  | **As of<br>10/6/22** | **Cash Activity<br>10/7/22 - 12/31/22** | **Estimate<br>Changes (1)** | **Transfers,<br>Reclassifications,<br>Adjustments** | **As of<br>12/31/22** |
|  **CASH AND INVESTMENTS** |  |  |  |  |  |  |
|  Reserves for Disputed Claims |  | $18 | $— | $— | $(1) | 17 |
|  Reserves for Operating Expenses, Taxes, and Other |  | 101 | (6) | 0 | 1 | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Cash & Investments - Restricted** |  | **119** | **(6)** | **0** | **—** | **114** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Cash & Investments - Unrestricted** |  | **34** | **36** | **(0)** | **—** | **69** |
|  **TOTAL CASH AND INVESTMENTS [A]** |  | $**153** | $**30** | $**—** | $**—** | **184** |
|  **CASH FLOW ESTIMATES** |  |  |  |  |  |  |
|  **Net Receipts** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Instruments |  | $20 | $(3) | $0 | $— | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other |  | 10 | (4) | 2 |  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Sub-Total - Net Receipts** |  | **30** | **(7)** | **2** | **—** | **25** |
|  **Recoveries From Non-Controlled Affiliates** | Note 2 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Europe |  | 203 | (7) | 15 |  | 211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asia <sup>(2)</sup> |  | 30 | (23) | 1 |  | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Sub-Total - Recoveries From Non-Controlled Affiliates** |  | **233** | **(30)** | **17** | **—** | **220** |
|  **Operating Expenses and Other** |  | **(83)** | **6** | **(2)** | **—** | **(79)** |
|  **Estimated Taxes Payable** | Note 6 | **(18)** | **1** | **(1)** | **—** | **(18)** |
|  **TOTAL CASH FLOW ESTIMATES [B]** |  | $**162** | $**(30)** | $**16** | $**—** | **148** |
|  **ESTIMATED CASH AVAILABLE FOR DISTRIBUTIONS [A+B]** |  | $**315** | $**0** | $**16** | $**—** | **332** |

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(1) Estimate change for Recoveries from Non-Controlled Affiliates –
Europe primarily relates to the positive impact of movements in foreign exchange rates during the period.

(2) Cash Activity for Recoveries from Non-Controlled Affiliates – Asia
primarily relates to a distribution from affiliates in Australia.

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**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

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**Estimated Remaining Creditor Recoveries** 

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The following schedule shows the estimated remaining creditor recoveries from LBHI by claim class, based on the "Estimated Cash Available for Distributions" in the preceding table on page 4. The estimated remaining recoveries on page 4 and the schedule below do not include potential recoveries from the Excluded Recoveries (See Note 4 – Legal Proceedings).

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *($ in millions)* | *($ in millions)* |  |  |  |  |  |
| **Lehman Brothers Holdings Inc.** | **Lehman Brothers Holdings Inc.** |  |  |  |  |  |
|  |  | **Allowed Claims<br>Eligible for<br>Distributions <sup>(1)</sup>** | **Estimated<br>Remaining<br>Recovery % as<br>of 12.31.22** | **Estimated<br>Remaining<br>Recovery % as<br>of 12.31.22** | **Actual Recovery% Thru D25 <sup>(2)</sup>** | **Estimated<br>End of Case<br>Recovery %** |
| **Class** | **Designation** | $ | $***A*** | ***A*** | ***B*** | ***= A + B*** |
| 3 | Senior Unsecured | $82521 |  | 0.202% | 46.526% | 46.729% |
| 4A | Senior Affiliate Claims | 33537 |  | 0.178% | 37.472% | 37.650% |
| 4B | Senior Affiliate Guarantee | 9521 |  | 0.174% | 36.566% | 36.740% |
| 5 | Senior Third-Party Guarantee | 30558 |  | 0.139% | 29.257% | 29.396% |
| 7 | General Unsecured | 4930 |  | 0.188% | 43.555% | 43.743% |
| 8 | Derivative Affiliate / Affiliate Guarantee Claims | 451 |  | 0.164% | 34.427% | 34.591% |
| 9A | Third Party Guarantee Derivatives | 17923 |  | 0.131% | 27.539% | 27.670% |
| 9B | Third Party Guarantee Derivatives RACER's |  |  | 0.080% | 16.743% | 16.822% |
| 10A | Subordinated Class 10A Claims | 3399 |  |  |  |  |
| 10B | Subordinated Class 10B Claims | 10330 |  |  |  |  |
| 10C | Subordinated Class 10C Claims | 1493 |  |  |  |  |
|  | **Cash Available for Distributions on Allowed Claims** | $**194664** |  |  |  |  |
|  | **Reserve for Disputed Claim, net of Plan Adjustments and Interest <sup>(3)</sup>** |  |  |  |  |  |
|  | **Estimated Cash Available for Distributions** |  |  |  |  |  |

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(1) Estimated Recovery percentages are calculated based on recoveries of Allowed Claims Eligible for Distributions
as reported on Exhibit B of the 25<sup>th</sup> Distribution Notice filed on September 29, 2022. For purposes of this calculation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Allowed Claims exclude (i) claims against LBHI satisfied in full through the combination of the primary
obligor and guarantee distributions from LBHI, and (ii) previously Allowed Claims that have been withdrawn.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Allowed Claims Eligible for Distributions exclude Allowed Claims that LBHI owns against itself.

(2) The 25<sup>th</sup> Plan Distribution occurred on October 6,
2022 (" <u>D25</u> "). Through D25, the Debtors have made distributions to creditors totaling $129.0 billion, of which $96.0 billion were payments on account of claims owned or formerly owned by third party creditors.

The 26<sup>th</sup> Plan Distribution is scheduled to occur on April 6, 2023.

(3) The last remaining Disputed Claim is a Class 9A – Third Party Guarantee Derivative claim relating to
a primary claim held by Enasarco against LBF. LBHI has entered into a stipulation such that the allowed amount of this Class 9A claim will be based on the outcome of LBF's litigation against Enasarco in Switzerland, subject to a cap. LBHI
has reserved for the full potential obligation under this agreement, including corresponding Plan Adjustments and interest calculated pursuant to the Plan, entirely in cash. See *Note 4 – Legal Proceedings – LBF – Enasarco* for
further information.

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**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

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**III.** **Notes to the Cash Flow Estimates** 

**Note 1 – Basis of Presentation** 

***Objectives***

On the Effective Date, the Plan became effective and the Debtors emerged from bankruptcy with a new Board of Directors (LBHI's Board of Directors hereinafter referred to as the "<u>Board</u>"). The Company continues to pursue the objectives of asset value maximization and timely distributions to creditors of available cash through the optimal execution of an orderly wind down process. Pursuant to the Plan, the Plan Administrator has made and expects to continue to make distributions to creditors of LBHI.

***Basis of Presentation***

The information and data included in the Quarterly Financial Report, including the Notes to the Cash Flow Estimates (the "<u>Quarterly Financial Report</u>") are derived from sources available to LBHI and LBHI-Controlled Affiliates (collectively, the "<u>Company</u>"). The term "<u>LBHI-Controlled Affiliates</u>" refers to those affiliates that are directly or indirectly controlled by LBHI and have not filed for protection under Chapter 11 of the Bankruptcy Code. LBHI-Controlled Affiliates excludes, among others, certain affiliates (such as Lehman Brothers International (Europe) (in administration) ("<u>LBIE</u>")) that were not managed or controlled by LBHI as of the Effective Date and are under separate administrations abroad (collectively, "<u>Non-Controlled Affiliates</u>").

The information and data included in these cash flow estimates and notes thereto (the "<u>December</u> <u>31, 2022 Cash Flow Estimates</u>") were prepared to update the October 6, 2022 Cash Flow Estimates filed November 23, 2022 (the "<u>October</u> <u>6, 2022 CFE</u>"), and are based on estimated cash flows from assets managed in an orderly wind down and/or sale (and related costs of operations) until the Company's activities are fully resolved.

These December 31, 2022 Cash Flow Estimates include an estimate of expenses to be paid through final termination of the Company on such matters as asset disposition, litigation and disputed claims resolution, administrative wind-down, and related activities. These estimates also include the estimated costs of a small subset of the Company's current staff committed to stay for many years, if necessary, to oversee the resolution of remaining disputes, other matters and residual wind down activities. These estimates are subject to ongoing review and revision. Actual expenses may differ materially from these estimates.

The Company has prepared the Quarterly Financial Report based on the information available to the Company at the date of filing; however, such information may be incomplete and may be materially deficient. Material uncertainties continue to exist regarding the ultimate value realizable from the Company's assets, the timing of asset recoveries, future costs, and the eventual level of allowed creditors' claims. Accordingly, the Quarterly Financial Report is not meant to be relied upon as a complete description of the Company, its business, condition (financial or otherwise), results of operations, prospects, assets, or liabilities. The Company reserves all rights to revise this report.

In preparing the Quarterly Financial Report, the Company made various estimates and assumptions based on information available to the Company. As such, this report contains forward-looking statements that involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including all statements containing information regarding the intent, belief or current expectation of the Company and members of its management. Accordingly, the financial information herein is subject to change and any such change may be material.

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**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

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**Note 1 – Basis of Presentation *(continued)*** 

The Quarterly Financial Report should be read in conjunction with the Company's previous filings, including Form 8-K reports as filed with the United States Securities and Exchange Commission ("<u>SEC</u>"), the Plan and related Disclosure Statement (the "<u>Disclosure Statement</u>") dated August 31, 2011, and other documents filed after the Commencement Dates with various regulatory agencies or the Bankruptcy Court by LBHI and LBHI-Controlled Affiliates.

Future expenses and distributions are dependent in large measure on the resolution of various legal matters involving the Company and its Non-Controlled Affiliates. (See *Litigation* below.) The remaining legal matters require resolution in the United States, as well as multiple foreign jurisdictions, including the United Kingdom (UK), Germany, Switzerland, India, and Australia. The timing for achieving final administrative or judicial resolution of these legal issues is uncertain. Consequently, the Company cannot definitively specify a date for the final termination of its activities.

All cash flows in these Estimates are presented on an undiscounted basis.

**Key Assumptions** 

***Recoveries from Non-Controlled Affiliates***

Estimates of recoveries from Non-Controlled Affiliates are based on information obtained from both Non-Controlled Affiliates' fiduciaries, as well as information obtained by the Company through settlement negotiations and involvement on creditors' committees. (See *Note 2 – Due from Non-Controlled Affiliates* for additional information)

Certain receivables from Non-Controlled Affiliates are denominated in foreign currencies, and as such, estimated recoveries related to these receivables are subject to movements in foreign exchange rates. The Company does not hedge against movements in foreign exchange rates.

The majority of estimated remaining recoveries from Non-Controlled Affiliates are contingent upon (i) the resolution of matters in dispute and/or active litigation, (ii) the receipt of non-U.S. government and/or Court approvals, and/or (iii) the final wind down of estates not controlled by the Plan Administrator. As such, the timing and amount of future recoveries from Non-Controlled Affiliates are uncertain, and actual recoveries may differ materially from these estimates.

At this stage, the number of outstanding matters has been substantially reduced, allowing for greater transparency into the Company's internal and confidential assumptions regarding expected recoveries on individual contested matters. Such transparency could undermine the ability of the Company to achieve optimal outcomes through negotiated settlements. Solely for the purpose of maintaining the confidentiality of its assumptions relating to these uncertain recoveries, which are informed by privileged advice from counsel, the Company excludes from its December 31, 2022 Cash Flow Estimates all potential recoveries related to the dispute between LBHI and other creditors (known as "<u>ECAPS</u>") over entitlements to certain funds available for subordinated creditors at non-controlled UK affiliate Lehman Brothers Holdings PLC ("<u>LBH PLC</u>"). (See Excluded Recoveries in *Note 4 – Legal Proceedings* for further information.) As a result, LBHI excludes from its December 31, 2022 Cash Flow Estimates all potential recoveries from its subordinated debt claim against LBH PLC (including indirectly LBIE's litigation against AGR), and its agreements with holders of approximately 16.8% of ECAPS.

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 1 – Basis of Presentation *(continued)*** 

***Litigation***

The Company is involved directly and/or indirectly in numerous litigations and disputes that will impact its recoveries from Non-Controlled Affiliates. The Company's estimates of recoveries from Non-Controlled Affiliates incorporate the Company's current assumptions regarding the resolution of these matters. The December 31, 2022 Cash Flow Estimates exclude all potential recoveries from LBHI's subordinated debt claim against LBH PLC (including indirectly LBIE's litigation against AGR), and its agreements with holders of approximately 16.8% of ECAPS, which are treated as Excluded Recoveries herein (see *Note 4* – *Legal Proceedings* in for additional information).

In addition, the Company has certain litigation pending against other parties in U.S. courts which may result in potential recoveries to the Company. For the purpose of these December 31, 2022 Cash Flow Estimates, estimates for all such litigations are included (see *Note 4* – *Legal Proceedings* for additional information). The estimated costs (i.e., professional, legal, and advisory fees) of supporting all of the Company's litigations, including the Excluded Recoveries, *are* included.

***Reporting of Claim Assignments***

As part of the Company's planned operational wind down and legal entity dissolution process, LBHI has received claims against itself by way of assignment from various affiliated entities, with no resulting economic effect on estimated overall recoveries. The receivables and payables of such claims are netted in this Quarterly Financial Report.

This Quarterly Financial Report:

• reflects activities through December 31, 2022;

• is not audited nor prepared in accordance with U.S. Generally Accepted Accounting Principles (" <u>GAAP</u> ");

• includes certain items that remain under continuing review by the Company and may be accounted for differently in future Quarterly Financial Reports.

***Due from Affiliates***

**(*as shown in the Balance Sheets and Note 2 and Note 3 herein)*** 

Due from Affiliates represents (i) LBHI and LBHI-Controlled Affiliates receivables related to transactions with Non-Controlled Affiliates, and (ii) LBHI receivables related to transactions with LBHI-Controlled Affiliates.

Following the announcement in August 2022 by the UK Supreme Court that it declined to hear LBHI's appeal on the ECAPS matter, the Company amended its methodology for recording Due from Non-Controlled Affiliates balances and Due to LBHI from LBHI-Controlled Affiliates balances in the Balance Sheets. In prior periods, the Company had recorded these receivables in the Balance Sheets at historical book values, and where applicable, the balances were recorded net of cash distributions. In these December 31, 2022 Balance Sheets, Due from Non-Controlled Affiliates and Due to LBHI from LBHI-Controlled Affiliates are recorded at estimated maximum potential remaining recoveries. These estimates for maximum potential remaining recoveries are materially higher in the aggregate than the Company's current total estimated recoveries on these claims. These estimates are subject to ongoing review and revision.

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 2 – Due from Non-Controlled Affiliates** 

The following table presents, on an aggregate basis for LBHI and LBHI-Controlled Affiliates, admitted or agreed filed claims, collections to date from Non-Controlled Affiliates, aggregate Maximum Potential Recovery and aggregate estimated remaining recoveries:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | | | | | | **Estimated Recoveries <sup>(3)</sup>** |  |
| $ in millions | **Local<br>Currency** | **Admitted<br>and/or Agreed<br>Claims in<br>Local<br>Currency <sup>(1)</sup>** | **Collections<br>To Date in<br>Local<br>Currency<br><sup>(1)</sup>** | **Admitted and/or<br>Agreed Filed<br>Claims in USD<br><sup>(1)</sup>** | **Collections<br>To Date in<br>USD <sup>(1)</sup>** | **Maximum<br>Potential<br>Recovery in<br>USD <sup>(2)</sup>** | **LBHI & LBHI-<br>Controlled**<br>**Affiliates** |  |
|  **Europe** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lehman Brothers Holdings PLC - Subordinated <sup>(4)</sup>  | GBP | 1061 |  | 1601 |  |  | *Not included* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Europe - Subordinated <sup>(5)</sup>**  |  |  |  | 1601 |  |  | *Not included* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lehman Brothers Finance S.A. <sup>(5)</sup>  | CHF | 11092 | (2308) | 11997 | (2497) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lehman Brothers Holdings PLC - Senior <sup>(5)</sup>  | GBP | 402 | (308) | 486 | (373) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Thayer Properties Limited | GBP | 172 | (103) | 208 | (125) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LB (PTG) Ltd <sup>(5)</sup>  | GBP | 171 | (94) | 207 | (113) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lehman Brothers Limited <sup>(5)</sup>  | GBP | 155 | (131) | 187 | (159) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Europe - Senior** |  |  |  | 13086 | (3267) |  | 211 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Europe** |  |  |  | **14686** | **(3267)** | **1903** | **211** |  |
|  **Asia** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LB Commercial Corp. Asia Limited <sup>(5)</sup>  | HKD | 19377 | (12134) | 2493 | (1553) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LB Asia Pacific (Singapore) PTE | SGD | 936 | (559) | 698 | (417) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LB Investments PTE Ltd | SGD | 805 | (520) | 600 | (388) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lehman Brothers Australia Ltd <sup>(5)</sup>  | AUD | 114 | (85) | 77 | (58) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other |  |  |  | 82 | (72) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Asia** |  |  |  | **3951** | **(2488)** | **51** | **9** |  |
|  **Total** |  |  |  | $**18637** | $**(5754)** | $**1954** | $**220** |  |

---

(1) Total Europe – Senior and Total Asia "Admitted or Agreed Claims in Local Currency,"
"Collections to Date in Local Currency," "Admitted or Agreed Filed Claims in USD," and "Collections to Date in USD" include statutory interest expected and/or received to date, less (i) any applicable tax
withholdings, which the Company will claim from the relevant tax authorities, and (ii) any distributions received on the claims prior to the assignments of the claims to LBHI and/or LBHI-Controlled Affiliates.

(2) Refer to *Note 1 – Basis of Presentation – Due from Affiliates* herein for further information
on the Maximum Potential Recovery in USD. The Total Europe balance in Maximum Potential Recoveries includes an estimate for Lehman Brothers Holding PLC – Subordinated.

(3) Refer to *Note 1 – Basis of Presentation* herein for further information on the estimated recoveries
from Non-Controlled Affiliates. Estimated Recoveries for Lehman Brothers Holdings PLC – Subordinated are treated as an Excluded Recovery herein, and therefore these December 31, 2022 Cash Flow
Estimates exclude any estimated recovery for Lehman Brothers Holdings PLC – Subordinated.

(4) Total Europe – Subordinated does not include potential statutory interest and has not been adjusted for
guarantee claim payments by LBHI.

(5) Includes certain claims against Non-Controlled Affiliates acquired
through settlements with third parties.

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 2 – Due from Non-Controlled Affiliates *(continued)*** 

The table below presents the Maximum Potential Recovery Due from Non-Controlled Affiliates balances as of December 31, 2022, and the related activity since the previously filed Quarterly Financial Report as of October 6, 2022 (See Section IV – Balance Sheets):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | Activity 10/7/22 - 12/31/22 | Activity 10/7/22 - 12/31/22 | |
| $ in millions | As of October<br>6, 2022 | Cash Receipts <sup>(1)</sup> | Other <sup>(2)</sup> | As of December<br>31, 2022 |
|  Due From Non-Controlled Affiliates | $1904 | $(27) | $78 | $1954 |

---

(1) Cash primarily includes a distribution from Non-Controlled Affiliates
in Australia.

(2) Other includes the positive impact of movements in foreign exchange rates for the period calculated on the
historical net receivable balances, partly offset by a decrease in local currency Maximum Potential Recovery.

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 2 – Due from Non-Controlled Affiliates *(continued)*** 

The Company owns senior claims with an aggregate remaining unpaid balance of GBP 94 million and a subordinated claim of GBP 1.1 billion against LBH PLC, a non-controlled affiliate in administration in the UK. LBH PLC is the sole beneficiary of all distributions flowing from Lehman Brothers Holdings Intermediate 2 Ltd. ("<u>LBHI2</u>"), and LBHI2 is, other than Elliott Management Corporation and King Street Capital Management Corporation L.P. (together, the "<u>Funds</u>"), the sole beneficiary of the Wentworth Joint Venture related to LBIE (described below).

*<u>Wentworth Joint Venture related to LBIE</u>*

A joint venture was formed on January 31, 2014 to facilitate the resolution of LBIE claims (the "Joint Venture"). The economic beneficiaries of the Joint Venture include LBHI2 and the Funds.

• LBHI2 contributed to the Joint Venture its admitted senior claim of GBP 36.3 million (" <u>Senior Claim</u> "), subordinated claims of GBP 1.24 billion (" <u>Sub Debt</u> "), and an economic
interest in its preferred equity (" <u>Preferred Equity</u> ") in LBIE.

• The Funds paid approximately GBP 650 million to LBHI2 (by way of a capital contribution to the Joint Venture) and contributed to the Joint Venture the distributions on their claims against LBIE (approximately GBP
2.6 billion face as of January 31, 2014) in excess of the principal amount plus post-administration interest at 8% per year. LBHI2's final recoveries and distributions will be determined following the resolution of the LBIE estate.

The Joint Venture includes a joint recovery pool governed by a specific sharing formula. Subject to certain adjustments, which could be material, all recoveries from the Sub Debt, Senior Claim, Preferred Equity, and the Funds' contribution are split as follows:

(a) 100% to the Funds up to the Tier 1 Pool Threshold Amount;

(b) For recoveries between the Tier 1 Pool Threshold Amount up to the Tier 2 Pool Threshold Amount, 70% to the
Funds and 30% to LBHI2;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) For recoveries between the Tier 2 Pool Threshold Amount up to the Tier 3 Pool Threshold Amount, 50% to the
Funds and 50% to LBHI2; and

(d) For recoveries above the Tier 3 Pool Threshold Amount, 25% to the Funds and 75% to LBHI2.

The "<u>Tier 1 Pool Threshold Amount</u>" is GBP 650 million. The "<u>Tier 2 Pool Threshold Amount</u>" is GBP 1.3 billion plus interest calculated at the simple rate of 2.25% from November 30, 2013 through September 3, 2018; thereafter, interest is calculated at the simple rate of 1.25%. The "<u>Tier 3 Pool Threshold Amount</u>" is GBP 2.2 billion plus interest calculated at the simple rate of 4.25% from November 30, 2013 through September 3, 2018; thereafter, interest is calculated at the simple rate of 2.5%.

A detailed summary of the terms of the parties' commitments and the Joint Venture is available at <u>www.lehman-docket.com</u> in the Key Documents section.

If LBIE makes distributions on the Preferred Equity before aggregate distributions from the Joint Venture to the Funds and LBHI2 have reached GBP 2.2 billion (plus interest), then, in certain circumstances, LBHI2, Luxembourg Finance S.a.r.l. ("<u>Lux Finance</u>") and LBHI shall be obligated to make payments to preserve the economic terms of the transaction as if 100% of the Preferred Equity proceeds had been transferred by LBHI2 to the Joint Venture.

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 3 – Due to LBHI from LBHI-Controlled Affiliates** 

The table below presents the Due to LBHI from LBHI-Controlled Affiliates balances as of December 31, 2022, and the related activity since the previously filed Quarterly Financial Report as of October 6, 2022 (See Section IV – Balance Sheets):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | Activity 10/7/22 - 12/31/22 | Activity 10/7/22 - 12/31/22 | |
| $ in millions | As of October<br>6, 2022 | Cash Receipts | Other | As of December<br>31, 2022 |
|  Due to LBHI from LBHI-Controlled Affiliates | $69 | $(1) | $(0) | $69 |

---

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 4 – Legal Proceedings** 

The Company is involved in or will be impacted by a number of judicial proceedings, including but not limited to the proceedings listed below. In its December 31, 2022 Cash Flow Estimates, the Company has included recovery estimates for all of its affirmative litigations, except for the matters shown in the Excluded Recoveries section in the table below. As more information becomes available, the Company may record revisions, which may be material, in future Quarterly Financial Reports. (See *Note 1 – Basis of Presentation – Litigation* for further discussion on the impact of these litigations on the cash flow estimates.) 

---

| | | |
|:---|:---|:---|
| **EXCLUDED RECOVERIES** | | |
| **Counterparty** | <br>**Controlled**<br> **Entities Party**<br> **to Litigation** | <br>**Court** |
| LB GP No. 1 Ltd<br> ("ECAPs") | LBHI | United Kingdom (a) |
| LBIE vs. AG Financial Products ("AGR") | None LBHI | NYS Supreme (b) |

---

---

| | | | |
|:---|:---|:---|:---|
| **OTHER LITIGATIONS** | | | |
| **Counterparty** | <br>**Controlled**<br> **Entities Party**<br> **to Litigation** | <br>**Court** | <br>**Most Recent<br>Disclosure** |
| LBF - Enasarco | None LBHI | Swiss Court | (c) |
| LBT Clawbacks | LBHI | Bankruptcy Court | October 1, 2020 Balance Sheets - Docket No. 60960 |
| Sweetwater | LBHI | Delaware Chancery Court | June 30, 2020 Balance Sheets - Docket No. 60877 |

---

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 4 – Legal Proceedings *(continued)*** 

***(a) <u>ECAPS</u>*** 

LBHI owns a claim of GBP 1.1 billion related to the subordinated debt issued by LBH PLC, a non-controlled affiliate in administration in the UK. LBH PLC also has outstanding subordinated notes owned by three third party trusts known as ECAPS I, II, and III. A dispute over the relative priority of these subordinated debt instruments issued by LBH PLC was litigated in the UK courts. The Court of Appeal held that the subordinated notes owned by ECAPS I-III are senior to the subordinated debt owned by LBHI. In August 2022, the Supreme Court declined to consider LBHI's appeal of that decision.

On March 14, 2023, LBH PLC filed an application to the High Court of Justice in England for directions (the "<u>Application</u>") on certain legal issues which are relevant to the priority and payment of future distributions to holders of its subordinated debts. The outcome of this Application will have a material effect on LBHI recoveries.

For further information, please refer to the "ongoing litigation" section of LBH PLC's website: <u>www.pwc.co.uk/services/business-recovery/administrations/non-lbie-</u>

<u>companies/lbh-plc-in-administration.html</u>

Solely for the purpose of maintaining the confidentiality of its assumptions relating to these uncertain recoveries, which are informed by privileged advice from counsel, LBHI treats recoveries from this matter as an Excluded Recovery in its December 31, 2022 Cash Flow Estimates. As a result, LBHI excludes from its December 31, 2022 Cash Flow Estimates all potential recoveries from its subordinated debt claim against LBH PLC (including indirectly LBIE's litigation against AGR), and its agreements with holders of approximately 16.8% of the ECAPS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

***(b) <u>LBIE vs. AG Financial Products ("AGR")</u>*** 

On November 28, 2011, LBIE sued AG Financial Products Inc. ("<u>AGR</u>"), an affiliate of Assured Guaranty Corp., which in the past had provided credit protection to counterparties under credit default swaps. LBIE's complaint, which was filed in the Supreme Court of the State of New York (the "<u>New York Supreme Court</u>"), alleged that AGR improperly terminated nine credit derivative transactions between LBIE and AGR and improperly calculated the termination payment in connection with the termination of 28 other credit derivative transactions between LBIE and AGR. LBIE asserted in the complaint that AGR owes LBIE a termination payment of approximately $1.4 billion.

On July 2, 2018, the New York Supreme Court dismissed LBIE's claims with respect to the nine allegedly improperly terminated transactions in their entirety. That ruling remains subject to appeal. The Court also dismissed the claim that AGR breached its implied duty of good faith and fair dealing with respect to the valuation of the 28 terminated credit derivatives transactions, but found that there is a genuine question of fact as to the reasonableness and good faith of AGR's calculation of its loss, and which allowed LBIE to proceed with its claim against AGR for breach of contract.

The trial in the New York State Supreme Court, Commercial Division concluded on November 19, 2021. On March 8, 2023, the Court issued its decision in favor of AGR and granted AGR's claim. LBIE will have 30 days from entry of the judgment to file a Notice of Appeal.

Solely for the purpose of maintaining the confidentiality of its assumptions relating to these uncertain recoveries, which are informed by privileged advice from counsel, LBHI treats the AGR litigation as an Excluded Recovery herein and therefore excludes estimates for the AGR litigation from these December 31, 2022 Cash Flow Estimates.

The ultimate outcome of this litigation will have a material effect on the results of LBH PLC (indirect beneficiary of LBIE). The Company has claims against LBH PLC (*see Note 2 – Due from Non-Controlled Affiliates*).

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 4 – Legal Proceedings *(continued)*** 

***(c) <u>LBF– Enasarco</u>*** 

Enasarco v. LBF is a dispute regarding the appropriate valuation of a terminated derivative transaction. Enasarco filed a claim of CHF 67 million against LBF based on the alleged loss incurred on the replacement of its derivative trade. The replacement trade was executed several months after the termination date of the original trade with LBF. LBF argued, among other things, that Enasarco had an obligation to value the trade as of the Early Termination Date, which would have resulted in a receivable to LBF, but in any event by a date earlier than that used by Enasarco.

LBF pursued the receivable in the UK courts but was not successful. In Switzerland, LBF rejected Enasarco's claim and Enasarco objected. Enasarco's claim was litigated in first instance Swiss Court (on remand) on November 16, 2021. On December 22, 2021, the first instance Swiss Court (on remand) ruled in favor of Enasarco, granting Enasarco the full amount of its filed claim, plus certain legal costs. On February 24, 2022, LBF appealed this ruling to the Superior Court of the Canton of Zurich. On October 7, 2022, the Superior Court denied LBF's appeal on procedural grounds having nothing to do with underlying merits of the appeal. On November 8, 2022, LBF appealed this decision to the Swiss Federal Supreme Court and are awaiting a decision on that appeal.

LBHI is the largest creditor of LBF, a non-controlled affiliate in liquidation in Switzerland. LBF's remaining future distributions will be materially impacted by the outcome of this legal proceeding.

In addition, the outcome of LBHI's lone remaining disputed claim will be based on the outcome of this litigation (see footnote (3) on page 5 for more information).

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 5 – Taxes Payable** 

Taxes payable is an estimate of tax liabilities, net of the estimated impact of any refund claims, deposits, and net operating losses ("<u>NOL</u>"). Taxes payable have been allocated among the members of the LBHI Tax Group pursuant to the Debtor Allocation Agreement. The Debtor Allocation Agreement, which became effective on the Effective Date, addresses the relationship among the Debtors and certain Affiliates with respect to consolidated federal/combined state/local income taxes for pre-petition and post-petition years.

As of December 31, 2022, the Company recorded an estimate of $18.1 million for potential pre- and post-petition amounts owed to federal, state, local and international taxing authorities, net of expected refund claims. Between October 6, 2022, and December 31, 2022, the Company has reduced its tax payable by $0.2 million as a result of global tax audit progress.

***Net Operating Losses***

The NOLs of the LBHI Tax Group (including LBHI-Controlled Affiliates) are subject to audit and adjustment by the IRS and primarily expire in or about 2028. Substantially all of the LBHI Tax Group's current consolidated net operating loss carryovers are attributable to the Debtors. The Plan provides for an orderly liquidation of the Debtors. As previously disclosed in the Company's Quarterly Financial Report as of March 31, 2012 [Docket No. 29731], the LBHI Tax Group received a private letter ruling from the IRS in connection with the Plan going effective that stated (i) the liquidation of the Debtors for U.S. federal income tax purposes may occur over an extended period, and (ii) the reduction of the LBHI Tax Group's NOLs as a result of the discharge

of debt pursuant to the Plan generally would not occur until completion of the liquidation.

In January 2020, the Company received a supplemental IRS ruling extending the original ruling relating to the Company's liquidation. All remaining Debtor NOLs not previously utilized to absorb taxable income of the LBHI Tax Group are expected to be fully utilized to offset income resulting from the discharge of debt on the final date of liquidation of LBHI.

------

**Quarterly Financial Report as of December 31, 2022 (Unaudited)** 

------

**Note 6 – Subsequent Events** 

***<u>26th Plan Distribution</u>***

On April 6, 2023, LBHI will make its 26<sup>th</sup> Plan Distribution to creditors. The Company will distribute approximately $44 million, including $41 million to third party creditors.

Through D26, the Debtors will have made distributions to creditors totaling $129.0 billion, of which $96.0 billion were payments on account of claims owned or formerly owned by third party creditors.

------

**IV.** **Balance Sheets** 

**LEHMAN BROTHERS HOLDINGS INC. and LBHI-Controlled Affiliates**

**Balance Sheets As of December 31, 2022** 

(Unaudited)

---

| | | | |
|:---|:---|:---|:---|
| **($ in millions)** | | **Lehman<br>Brothers<br>Holdings Inc.**<br>**08-13555 (1)** | **Total<br>LBHI-<br>Controlled**<br>**Affiliates (2)** |
|  **Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and short-term investments |  | $44 | $26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and short-term investments pledged or restricted |  | 108 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial instruments and other inventory positions |  | 9 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables from LBHI-Controlled Affiliates and other assets |  | 9 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments in Affiliates |  | 71 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Due from Affiliates:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LBHI-Controlled Affiliates | Note 3 | 69 | (0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-Controlled Affiliates | Note 2 | 1850 | 105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Due from Affiliates** |  | **1918** | **105** |
|  **Total Assets** |  | $**2160** | $**147** |
|  **Liabilities and Stockholders' Equity** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payables to LBHI and other liabilities |  | $9 | $1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Due to Affiliates:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LBHI |  | $0 | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-Controlled Affiliates |  |  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Due to Affiliates** |  | 0 | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxes Payable |  | 14 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities Subject to Compromise |  | 128505 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Liabilities** |  | **128528** | **76** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Stockholders' Equity** |  | **(126367)** | **71** |
| **Total Liabilities and Stockholders' Equity** |  | $**2160** | $**147** |

---

See accompanying Notes to Balance Sheets

------

Note: All values that are exactly zero are shown as "—". Values between zero and $500,000 appear as "0".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Balances for LBHI do not reflect the impact of eliminations of intercompany balances and investments in
subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Balances for LBHI-Controlled Entities reflect the impact of eliminations of (i) intercompany balances only
between LBHI-Controlled Entities and (ii) investments in subsidiaries only between LBHI-Controlled Entities.