Lehman takes aim at guarantee claims
Lehman Brothers Holding Inc (LBHI) confirmed yesterday in its bankruptcy disclosure statement that there are doubts over the validity of third-party and affiliate guarantee claims that cite a pledge by the holding company to take on its subsidiaries' liabilities and obligations. Those claims could now be challenged.
The pledge in question, known as the board resolution guarantee, was drafted on June 9, 2005. Signed by then-chief executive Richard Fuld and former board director John Macomber, it appears to guarantee the liabilities of 18 affiliates, including Lehman Brothers International Europe, Lehman Brothers Finance and Lehman Brothers Special Financing.
The move comes after speculation over the validity of the resolution, which is analysed in the current issue of Risk and was first reported on March 25
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