Important Information for Holders of Lehman Structured Products

Representing Investors Nationwide

We have received numerous inquiries from current and prospective clients about the priority their structured notes and other products will have in the Lehman bankruptcy proceeding.

Structured notes and products issued by Lehman Brothers, Inc. are considered senior unsecured debt instruments of Lehman Brothers Holdings, Inc. (LBHI). If you are a holder of a Lehman structured note or other structured products, the following information should provided some insight into your options for recovering some of your investment through the bankruptcy proceeding.

The bankruptcy filing on September 15, 2008, had a chilling effect on the market as a whole and in individual investors specifically. Because of the filing, Lehman note holders will no longer receive any interest or principal payments on their Lehman structured products. However, as a holder of what is considered to be senior unsecured debt of LBHI, a holder of the paper has a claim as a senior unsecured creditor against the company’s bankruptcy estate.

A official Committee of Unsecured Creditors has been chosen by the the U.S. Trust monitoring the bankruptcy proceeding. That committee has been charged with maximizing the overall return to the unsecured creditors. Wilmington Trust Company has been chosen as indenture trustee for the structured products was chosen by the U.S. Trustee to serve on the official committee.

The bankruptcy court will ultimately approve a reorganization plan or oversee the liquidation of Lehman assets and determine the amount each class of creditor will receive from the estate. The order of priority of payments depends several factors but typically is as follows:

1. Secured Creditors, such as lien holders, have first priority up to the value of the secured interest.
2. Senior unsecured creditors,(structured note and product holders), generally are next in priority. Among the unsecured senior debt holders, there are certain priority claims (employee benefits and tax obligations).
3. Subordinated unsecured debt holders.
4. Preferred stock holders are next.
5. Common stock holders have last priority.

At this time, it is hard to predict how long the bankruptcy proceeding will take to be resolved but bankruptcy proceedings of similar nature typically take three or more years to make distributions to creditors and resolve the remaining claims.

For additional information on Lehman bonds and structured notes, please see our web page on Lehman notes or call us our offices at (866) 352-3476.