HK Lehman minibond resolution may be approved despite bond-holder dissent

Despite objections submitted to the US bankruptcy court from the holders of Lehman Brothers minibonds, the latest resolution effort to reach settlement on the sale of credit-linked notes to retail investors in Hong Kong may still be approved, as the 75% threshold required will predominantly consist of the banks themselves, who agreed to repurchase many of the so-called bonds, say lawyers.

On April 5, minibond holders applied to the Southern District of New York bankruptcy court requesting it not make an order that would allow collateral to be released under a derivatives procedures order (DPO). These holders of credit-linked notes, dubbed ‘minibonds', are fearful their rights to further litigate would be compromised if the bankruptcy court agrees to the resolution. They are still seeking the full return of their investments, despite distributing banks sweetening their offer of