Lehman Likely to Pay Dividend in H1 2022

The latest update published on 1 October 2021 from the Liquidator of the Lehman Brothers Australia Estate (LBA) relates to Private Binding Rulings (Rulings) from the ATO.  Our understanding is these are necessary to obtain a resolution of the outstanding tax disputes.  As we previously advised, the tax discussion between LBA and the ATO is a source of uncertainty and cash remaining in the estate that would otherwise be distributed as a final dividend is being held back against the remote possibility it is needed to pay a tax bill to the ATO in any final outcome.

Payment of all the cash to the ATO is extremely unlikely from what we know.  However, our understanding is that under law, the Liquidator would be personally liable if he had previously paid out monies to creditors leaving insufficient monies remaining to pay any debts owed to the ATO.  The Liquidator is therefore unwilling to expose himself to this personal risk however remote; a not unreasonable position.  Once issued, the Rulings effectively absolve the Liquidator of any responsibility to hold back more monies than the ATO is claiming under the Rulings.

The tax issues are highly complex, but it appears in a practical sense the Liquidator has received favourable indications of the ATO’s position on some of the issues where there is disagreement and unfavourable indications on others.  However, the overall position is hopefully deemed to be an acceptable one such that the Liquidator can accept the ATO Rulings in totality and not continue the dispute.  However, this is not as yet a “done deal” so some caution is still warranted. 

Once the Rulings are issued, the Liquidator will need to go through its own procedures to pay out the final dividend.  This is largely a mechanical process and should take only a few months at most.  The final dividend is therefore forecast to comprise the remaining monies left in the estate less any monies claimed by the ATO under its Rulings (and not disputed by the Liquidator). Our expectation is the Liquidator is unlikely to ask for further claims from creditors to be submitted over the Christmas and January holiday period as part of its own process so assuming issues with the ATO are resolved this calendar year, we expect the Liquidator to start the final dividend declaration process early in 2022.

If you or anyone you know (either an organisation or individual) has not made a claim against the Lehman Brothers Australia estate for any losses occurred through investments in any structured products purchased from Lehman Brothers or its predecessor organisation Grange Securities, now is the time to look to lodge such a claim.  Please do no wait for the Liquidator to call for final claims, but rather act now.  Amicus has helped over thirty different for holders of structured products lodge successful claims and will consider helping any potential claimant regardless of size on a success fee only basis; meaning no downside risk to the claimant if the claim were to be rejected. Our experience is understanding the claims process is key and making a claim yourself or via a law firm that has not made successful claims previously is unlikely to lead to a positive outcome. Please call Amicus if you would like to discuss any aspect of making a claim or if you know of another party who may have a potential claim.

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