That Lehman Brothers was murdered with the bare hands of Hank Paulson and Ben Bernanke with a “mandated bankruptcy” is now a well-established fact, at least by contemporary standards. Want proof? The desiccated husk of the one-proud bank has paid out more than $100 million since it went under. And it keeps finding more money to give away. Why, the former bank’s European arm just stumbled upon £7-8 billion that had been lying around. Unfortunately for Lehman creditors, it had to wait until after the British decided to commit economic suicide to do so.
On Wednesday, the U.K. Supreme Court ruled that senior bondholders seeking interest payments of around $7 billion should get those first, before $1.6 billion in subordinated loans held by investment firms Elliott Management Corp. and King Street Capital Management LP are repaid….
The court ruling was mixed for some senior creditors. Dollar-denominated bondholders, led by Minnesota-based CarVal Investors LLC, had the value of their debt converted to pounds at the exchange rate on the day Lehman went bankrupt in September 2008. One pound fetched $1.79 then, compared with $1.29 now.
Those bondholders had asked for $2.5 billion to compensate them for the plunge in sterling. The court threw that claim out, saying that a more favorable payout on debt denominated in dollars would be like giving foreign-currency creditors “a one-way option” to select a better currency rate.