The Liquidator for Lehman Brothers Australia (LBA) obtained tax clearances from the ATO in October. This was the final impediment to declaring a dividend. Now it has been removed, the Liquidator Marcus Ayres now working at Kroll (liquidators being appointed in a personal capacity so the LBA bankruptcy stays with Marcus even if he changes employer) is able to declare a dividend which will be payable on 19 December 2022, or potentially earlier.
The dividend payment is likely to comprise nearly all the cash left in the LBA estate and therefore should be broadly in line with guidance given previously in March 2022 of a payment of slightly above 14 c/$ of accepted claims; although we expect the Liquidator to update claimants with the exact revised figure prior to payment.
For creditors to receive their monies via electronic funds transfer, the Liquidator previously asked all claimants to supply their bank account details (on a manual basis by completing a paper form verifying their claim amount and filling in their bank account details, scanning it and returning it to the Liquidator). The second stage of this process which is happening now is to verify the bank account details with a trusted third party provider PayOK. Apart from matching up the bank account details entered via the PayOK website with those the Liquidator now has on file, PayOK also do their own independent verification checks with the relevant banks to ensure the BSB and account details are held in the name of the claimant organisation. When using PayOK, Amicus recommends clients use the “basic” method of verification that requires scanning in a copy of a bank statement rather than the “express” method which asks for more sensitive information that Amicus thinks is unreasonable to provide.
The Liquidator is not forcing claimants to receive monies in this manner, but if the process is not completed the Liquidator will send a cheque to the mailing address it has on file for the claimant. In our opinion, this is less secure as contact details, organisation names and addresses change so the possibility the cheque is lost or does not reach the intended recipient in a timely manner (particularly before Christmas and into the January holiday period) is not negligible. Amicus has advised all its clients to supply and verify their bank account details so they can receive monies electronically and is currently helping them with this process.
The Liquidator is not describing this payment as the final dividend for two reasons. Firstly, Amicus understands there is a small amount of money (withholding tax) that is still to be rebated from HMRC (His Majesty’s Revenue and Customs – the UK equivalent of the ATO), but the Liquidator does not wish to delay the current payment waiting for these monies to be remitted.
Secondly, the Liquidator is still progressing expressions of interest in funding its potential claim against Fitch Ratings which will require a minimal amount of monies to be retained in the estate to cover the cost of the storage of LBA records and other minor expenses for the length of the case.
Obviously if there are residual monies left over when the issues above are resolved, the Liquidator will pay a final dividend at some point in the distant future. This could be a nominal one if the Fitch case does not progress or is unsuccessful, but could be another substantive one if the courts find against Fitch or, more likely, a favourable out of court settlement is reached.
Please feel free to contact Amicus if you have any questions regarding the LBA dividend, the process of registering to have it paid electronically (e.g. if you have not received an email from Kroll) or the potential legal case against Fitch.
