A lawsuit was filed in the high court on 9th September 2009 by the Minibond Investors Action Group (MIAG) against the issuer (Minibond Limited), arranger (Lehman Brothers Singapore Pte Ltd) and a distributor (Royal Bank of Scotland PLC (RBS)) of the Minibond Secured Note Programme (Minibond Programme).

You can read the press release of the lawsuit as well as the basis on which the MIAG is arguing their case here:

MIAG Lawsuit Against Lehman Brothers

Minibond investors who have failed to get any form of settlement can contact the MIAG at their website if you wish to know more or be part of their legal action.

Last week, SIAS organised a seminar to provide information on the filing of claims with Lehman Brothers Inc.

Lehman Brothers is in liquidation in the US and all creditors must lodge their claims with the US trustee, James W. Giddens, appointed under the Securities Investor Protection Act of 1970, as amended (“SIPA”) on or before 1 June 2009.

SIAS has a statement written in bold and capital letters on their website saying they cannot provide any advice as to whether a claim should be filed and how to go about it. However, they just published a FAQ today with  more information for Minibond holders.

At about the same time when this first surfaced, MAS issued a statement saying that the two Lehman Brothers entities incorporated in Singapore, Lehman Brothers Pte Ltd (LBPL) and Lehman Brothers Singapore Pte Ltd (LBSPL), hold a few hundred million in assets here. Similarly like SIAS, MAS is unable to provide any legal advice to investors on whether they should file a claim.

HSBC Institutional Trust Services has also updated their FAQ today with more information on this claiming process. They have also sent out a letter to affected Minibond holders. Inside the letter, they stated that they will not be filing a claim as they are not in a position to do so. The softcopy of this letter can be downloaded here : Lehman Liquidation Claim Notice from HSBC

The website for filing a claim can be found here:

Lehman Trustee

The process can be done electronically and the general claim form (not the SIPC form) should be used.

I’m afraid the whole thing is going to make everyone even more confused. Basically, SIAS, MAS and HSCB are telling you to consult your own lawyer on what to do next.

Unfortunately, I’m not legally trained and am unable to provide any proper advice on this. Hope to generate some useful discussion here.

Click here to leave a comment.

It has been reported in the news that the distributors of the Minibond products will be contributing money to the receivers’ cost of obtaining legal opinions. This is required due to the complex issues raised from lawyers dealing with Lehman Brothers in the US.

Even DJ newswire picked up the news from our MAS announcement and if you read the DJ report, you will probably interpret it at face value – distributors footing the legal fees.

Lehman Minibond Distributors to Help Pay Legal Fees (DJ newswire)

However, if you read the announcement by MAS carefully, you will find this sentence:

“The expenses will be refunded to the distributors from any proceeds of enforcement in the usual manner.”

Distributors of Lehman Minibond Notes to Contribute to Legal Defence (MAS announcement)

So in actual fact, the legal bill will be paid by Minibond investors.

Legal War Chest Beefed Up (Straits Times)

Click here to leave a comment.

HSBC Institutional Trust has informed MAS that they have taken certain steps in the interest of Lehman Minibond noteholders.

They have terminated the swaps of the underlying securities for series 1-8. This will help to preserve the value of the underlying securities.

Also, they have appointed three partners from PricewaterhouseCoopers Singapore (PwC) to act as receivers for series 5 to 8. Their role is to take control of the assets of these notes and to work closely with the trustee towards a solution which is in the best interests of noteholders. 

Separately, MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF) as an independent financial adviser to provide advice to investors on any potential restructuring of the minibond.

Click here to leave a comment.