On 16 June 2010, the Joint Administrators announced that they would be testing the feasibility of the Consensual Approach to the resolution of LBIE’s unsecured creditor claims. The Consensual Approach was conceptually outlined on the PwC-LBIA website at the time and can be viewed here.
LBIE also informed claimants that if they wished to be considered for the Consensual Approach, they would need to submit a proof of debt. The expectation at the time was that, if the Consensual Approach was formally launched later this year, a creditor would need to submit a proof of debt before 17 September 2010 to be considered for participation.
LBIE has since made significant progress in engaging with creditors and the Joint Administrators have been greatly encouraged by the extent of positive interest in the Consensual Approach.
Over the last few weeks, LBIE has both solicited and received feedback from counterparties regarding the proposed Consensual Approach. A consistent request from many counterparties has been to extend the deadline of 17 September 2010, in particular given the complexity of many creditors’ positions. Accordingly, the Joint Administrators have agreed, in conjunction with the Unsecured Creditors’ Resolution Working Group (“UCRWG”), a working group which includes members of the creditors’ committee, that the 17 September 2010 deadline for proof submission will be extended.
The Joint Administrators continue to develop the Consensual Approach. In consultation with the UCRWG, they are currently considering an appropriate date to set as a revised deadline. The Joint Administrators are also reviewing feedback from counterparties to assess whether any other refinements may be desirable in order to proceed.
The Joint Administrators will communicate further developments regarding the Consensual Approach in their 4th Progress Report, including an update on the period of extension that will be allowed for submission of proofs, unless that has been separately communicated in the intervening period. The 4th Progress Report is due to be published on 14 October 2010. In the meantime, LBIE’s counterparties should continue to finalise their submission of proofs of debt as soon as possible, as these will be required in order to comply with the revised timetable, when announced.
Should you have any questions regarding this update, please contact the Counterparty Communications and Management team at unsecuredcreditors@lbia-eu.com.