MOTION FOR FINAL DECREE CLOSING LEHMAN BROTHERS SPECIAL FINANCING INC.’S CHAPTER 11 CASE PURSUANT TO SECTION 350(a) OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3022
TO THE HONORABLE SHELLEY C. CHAPMAN, UNITED STATES BANKRUPTCY JUDGE:
Lehman Brothers Holdings Inc., as Plan Administrator (the “Plan Administrator”), respectfully represents:
Relief Requested
1. By this motion, the Plan Administrator requests entry of a final decree closing the chapter 11 case of Lehman Brothers Special Financing Inc. (Case No. 08-1388) (the “Closing Debtor”), pursuant to section 350(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), Rule 3022 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rule 3022-1 of the Local Bankruptcy Rules for the Southern District of New York (the “Local Bankruptcy Rules”). The Plan Administrator has liquidated all of the
WEIL:\97992083\1\58399.0011
08-13555-scc Doc 61141 Filed 05/27/21 Entered 05/27/21 23:23:09 Main Document Pg 4 of 15
Closing Debtor’s assets, resolved all of its disputed claims, and made its final Plan Distribution. Closing this chapter 11 case is therefore appropriate and will allow this Closing Debtor to cease incurring administrative fees. A closing report is attached hereto as Exhibit A (the “Closing Report”). A proposed form of final decree is attached hereto as Exhibit B.
Background
2. Beginning on September 15, 2008, and on various dates thereafter (the “Commencement Date”), each of the debtors in the above-captioned chapter 11 cases (the “Chapter 11 Entities”)1 commenced with this Court voluntary cases under chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”). The Chapter 11 Cases were consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015(b).
3. On December 6, 2011, this Court entered an order (the “Confirmation Order”) [ECF No. 23023] confirming the Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and Its Affiliated Debtors [ECF No. 22973] (the “Plan”). The Plan became effective on March 6, 2012 (the “Effective Date”).
1 The twenty-three Chapter 11 Entities are: Lehman Brothers Holdings Inc., LB 745 LLC, PAMI Statler Arms LLC, Lehman Brothers Commodity Services Inc., Lehman Brothers Special Financing Inc., Lehman Brothers OTC Derivatives Inc., Lehman Brothers Derivatives Products Inc., Lehman Commercial Paper Inc., Lehman Brothers Commercial Corporation, Lehman Brothers Financial Products Inc., Lehman Scottish Finance L.P., CES Aviation LLC, CES Aviation V LLC, CES Aviation IX LLC, East Dover Limited, Luxembourg Residential Properties Loan Finance S.a.r.l., BNC Mortgage LLC, Structured Asset Securities Corporation, LB Rose Ranch LLC, LB 2080 Kalakaua Owners LLC, Merit LLC, LB Somerset LLC, and LB Preferred Somerset LLC. The cases of LB 2080 Kalakaua Owners LLC, LB Preferred Somerset LLC, LB Somerset LLC, LB 745 LLC, PAMI Statler Arms LLC, CES Aviation LLC, CES Aviation V LLC, and CES Aviation IX LLC were closed on January 28, 2016 [ECF No. 51920]. The cases of East Dover Limited, Luxembourg Residential Properties Loan Finance S.a.r.l., and Merit LLC were closed on December 15, 2016 [ECF No. 54163]. The cases of LB Rose Ranch LLC, Lehman Scottish Finance L.P., Lehman Brothers Financial Products Inc., and Lehman Brothers Derivatives Products Inc. were closed on June 14, 2018 [ECF No. 58257]. The cases of Lehman Brothers Commercial Corporation, Lehman Brothers Commodity Services Inc., and Structured Asset Sercurities Corporation were closed on February 11, 2019 [ECF No. 59472]. The cases of Lehman Brothers OTC Derivatives Inc., Lehman Commercial Paper Inc, and BNC Mortgage LLC were closed on May 4, 2020 [ECF No. 60623].
WEIL:\97992083\1\58399.0011
2
08-13555-scc Doc 61141 Filed 05/27/21 Entered 05/27/21 23:23:09 Main Document Pg 5 of 15
4. Pursuant to the Plan, the Plan Administrator has the authority and right on behalf of each of the Chapter 11 Entities to carry out and implement all provisions of the Plan. The Plan Administrator has made significant progress in asset recovery and claims resolution for each of the Debtors. To date, the Plan Administrator has made distributions to creditors totaling approximately $128.8 billion, of which $95.8 billion were payments on account of third party claims against the Chapter 11 Entities. Since the Effective Date, twenty one of the twenty three Chapter 11 Cases were closed pursuant to final decrees issued by the Court on January 28, 2016 [ECF No. 51920], December 15, 2016 [ECF No. 54163], June 14, 2018 [ECF No. 58257], February 11, 2019 [ECF No. 59472] and May 4, 2020 [ECF No. 60623].
Jurisdiction and Venue
5. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
Basis for Relief Requested
6. Section 350(a) of the Bankruptcy Code provides that “[a]fter an estate is fully administered and the court has discharged the trustee, the court shall close the case.” Bankruptcy Rule 3022, which implements section 350 of the Bankruptcy Code, further provides that “[a]fter an estate is fully administered in a chapter 11 reorganization case, the court, on its own motion or on motion of a party in interest, shall enter a final decree closing the case.”
7. The term “fully administered” is not defined in either the Bankruptcy Code or the Bankruptcy Rules. The Advisory Committee Note to Bankruptcy Rule 3022 provides, in relevant part:
Factors that the court should consider in determining whether the estate has been fully administered include (1) whether the order confirming the plan has become final, (2) whether deposits required by the plan have been distributed, (3) whether the
WEIL:\97992083\1\58399.0011
3
08-13555-scc
Doc 61141 Filed 05/27/21 Entered 05/27/21 23:23:09 Main Document Pg 6 of 15
property proposed by the plan to be transferred has been transferred, (4) whether the debtor [or its successor] has assumed the business or the management of the property dealt with by the plan, (5) whether payments under the plan have commenced, and (6) whether all motions, contested matters, and adversary proceedings have been finally resolved.
The court should not keep the case open only because of the possibility that the court’s jurisdiction may be involved in the future. A final decree closing the case . . . does not deprive the court of jurisdiction to enforce or interpret its own orders and does not prevent the court from reopening the case for cause pursuant to § 350(b) of the Code.
Fed. R. Bankr. P. 3022, Advisory Comm. Note.
8. Courts have generally used the six factors listed in the Advisory
Committee Note to determine whether a case has been fully administered. See, e.g., In re Kliegl Bros. Universal Elec. Stage Lighting Co., Inc., 238 B.R. 531 (Bankr. E.D.N.Y. 1999); In re Jay Bee Enter., Inc., 207 B.R. 536, 538 (Bankr. E.D. Ky. 1997); In re Mold Makers, Inc., 124 B.R. 766 (Bankr. N.D. Ill. 1990). The six factors, however, are merely guidelines that aid a court’s determination, and each of the factors need not be present before a court enters a final decree. See Mold Makers, 124 B.R. at 768-69; see also Walnut Associates v. Saidel, 164 B.R 487 (E.D. Pa. 1994).
The Closing Debtor’s Chapter 11 Case Has Been Fully Administered
9. The Closing Debtor’s chapter 11 case has been “fully administered” within the meaning of section 350 of the Bankruptcy Code, making it appropriate for the Court to enter a final decree closing this case. Specifically, with respect to the Closing Debtor:
• the Confirmation Order is final and non-appealable;
• the Plan has gone effective;
• the transactions contemplated by the Plan have been consummated;
• all claims filed against the Closing Debtor have been either allowed or disallowed;
WEIL:\97992083\1\58399.0011
4
08-13555-scc
Doc 61141 Filed 05/27/21 Entered 05/27/21 23:23:09 Main Document Pg 7 of 15
• all payments required under the Plan by the Closing Debtor to its Creditors have been made; and
• the Closing Debtor is not party in any active adversary proceeding or contested matter pending before this Court.2
Based upon the foregoing, the Plan Administrator submits it is appropriate to close the chapter 11 case of this Closing Debtor.
10. Section 1930(a)(6) of title 28 of the U.S. Code requires that quarterly fees be paid to the U.S. Trustee after confirmation and consummation of a chapter 11 plan until a debtor’s case is closed. Unless and until the Court enters a final decree closing the chapter 11 case of this Closing Debtor, quarterly fees will continue to accrue. Inasmuch as there are no further assets or liabilities for the Closing Debtor to administer in the Bankruptcy Court, the Plan Administrator has determined that it is prudent to close the chapter 11 case of the Closing Debtor at this time to stop the accrual of further U.S. Trustee fees.
11. The Closing Debtor has made Distributions under the Plan of $15,531,950,533 in the aggregate. A breakdown of Distributions by the Closing Debtor made to date and the final distribution made by the Closing Debtor are included in the Closing Report.
12. The Closing Debtor will pay all outstanding U.S. Trustee fees due and owing for their chapter 11 case.
13. Accordingly, the Plan Administrator submits ample justification exists for entry of a final decree closing the chapter 11 case of the Closing Debtor.
The Final Distribution
14. Under the Plan and the Order In Aid of Execution of The Modified Third Amended Chapter 11 Plan of Lehman Brothers Holdings Inc. And Its Affiliated Debtors, dated January 31, 2013 [ECF No. 34348] (the “Order in Aid of Execution”), Distributions of Available
2 The Closing Debtor will work to administratively close any dockets that remain open.
WEIL:\97992083\1\58399.0011
5
08-13555-scc Doc 61141 Filed 05/27/21 Entered 05/27/21 23:23:09 Main Document Pg 8 of 15
Cash are to be made semi-annually on or about March 30 and September 30 of each year. Plan, § 8.3.
15. The Closing Debtor made its final distribution of $14,674,433 on the ordinary scheduled distribution date of April 1, 2021, and seeks authorization to close its chapter 11 case.
The Closing Report
16. In accordance with the requirements of Local Bankruptcy Rule 3022-1, annexed hereto as Exhibit A is the Closing Report. The Closing Report has also been filed with the Clerk of the Court contemporaneously herewith.
Notice
17. Notice of this Motion has been provided to (i) the United States Trustee for Region 2; (ii) the Securities and Exchange Commission; (iii) the Internal Revenue Service; (iv) the United States Attorney for the Southern District of New York; (v) the creditors of the Closing Debtor; and (vi) all other parties entitled to notice in accordance with the procedures set forth in the second amended order entered on June 17, 2010 governing case management and administrative procedures for these cases [ECF No. 9635]. The Plan Administrator submits that such notice is sufficient and no other or further notice need be provided.
18. No previous request for the relief sought herein has been made by the Plan Administrator to this or any other Court.
WEIL:\97992083\1\58399.0011
6
08-13555-scc Doc 61141 Filed 05/27/21 Entered 05/27/21 23:23:09 Main Document Pg 9 of 15
WHEREFORE the Plan Administrator respectfully requests that the Court grant
the relief requested herein and such other and further relief as it deems just and proper.
Dated: May 27, 2021
New York, New York
/s/ Garrett A. Fail
Jacqueline Marcus
Garrett A. Fail
WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue
New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007
Attorneys for Lehman Brothers Holdings Inc.
