Research Handbook on Cross-Border Bank Resolution
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Research Handbook on Cross-Border Bank Resolution

Edited by Matthias Haentjens and Bob Wessels

Since 2008, many countries across the globe have witnessed the introduction of new recovery and resolution regimes for banks. Whereas much may have been achieved on regional levels, this has not been perfect, and many global challenges remain unsolved. The Research Handbook on Cross-Border Bank Resolution analyses the strengths and weaknesses of the current regulatory framework for cross-border bank crises with contributions from eminent experts from the US, EU, Japan and China. The topic is addressed from both economic, and legal perspectives, with a special section devoted to real-life cases.
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Chapter 13: Lehman Brothers Treasury

Frédéric Verhoeven

Abstract

This chapter deals with the insolvency of Lehman Brothers Treasury Co. B.V. (LBT), a Lehman Brothers’ financing entity established in the Netherlands. The Dutch insolvency proceedings of LBT began with an application for suspension of payments, and after the initiation of formal bankruptcy proceedings, concluded with the confirmation of a composition plan. To date this plan has resulted in 13 distributions to creditors adding up to USD 12.3 billion. The unprecedented complexity of this insolvency and the difficulties inherent to proceedings of a cross-border nature posed various challenges to the administration of LBT in general and the successful conclusion of the composition plan in particular. These challenges, such as the complicated cross-border intra-group relations between the various Lehman entities, and their resolution, which could serve as a model for international bank recovery proceedings, are described in detail.

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