Exhibit 99.1

THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE PLAN.  ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT. THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT.

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

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	:
In re:	:	Chapter 11 Case No.
	:
LEHMAN BROTHERS HOLDINGS INC., et al.	:	08-13555 (JMP)
	:
Debtors.	:	(Jointly Administered)
	:
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DEBTORS’ DISCLOSURE STATEMENT FOR JOINT CHAPTER 11
PLAN OF LEHMAN BROTHERS HOLDINGS INC. AND ITS AFFILIATED
DEBTORS PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE

	WEIL, GOTSHAL & MANGES LLP
	Attorneys for Debtors and
	Debtors in Possession
	767 Fifth Avenue
	New York, New York 10153
	(212) 310-8000
Dated: April 14, 2010
New York, New York

TABLE OF CONTENTS

					Page
I.	INTRODUCTION				1
II.	OVERVIEW OF THE PLAN				2
	A.	Summary of the Plan			2
	B.	Classification, Treatment and Estimated Recovery for Each Class Under the Plan			3
	C.	Holders of Claims Entitled to Vote			23
	D.	Voting Procedures			24
	E.	Confirmation Hearing			25
III.	GENERAL INFORMATION				26
	A.	Overview of Chapter 11			26
	B.	Description and History of the Business of Lehman			27
		1	General Information Regarding Lehman		27
		2	Business Segments		28
			a.	Capital Markets Division	28
			b.	Investment Banking Division	29
			c.	Investment Management Division	29
		3	Corporate Structure		30
		4	Description of the Business of Each Debtor		32
			a.	Lehman Brothers Holdings Inc.	32
			b.	Lehman Commercial Paper Inc.	32
			c.	Lehman Brothers Commodity Services Inc.	32
			d.	Lehman Brothers Special Financing Inc., Lehman Brothers Derivative Products Inc. and Lehman Brothers Financial Products Inc.	32
			e.	Lehman Brothers OTC Derivatives Inc.	32
			f.	Lehman Brothers Commercial Corporation	32
			g.	LB 745 LLC	32
			h.	PAMI Statler Arms, LLC	32
			i.	CES Aviation LLC, CES Aviation V LLC and CES Aviation IX LLC	32

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			Page
	j.	East Dover Limited	32
	k.	Lehman Scottish Finance L.P	33
	l.	Luxembourg Residential Properties Loan Finance S.a.r.l.	33
	m.	BNC Mortgage LLC	33
	n.	LB Rose Ranch LLC	33
	o.	Structured Asset Securities Corporation	33
	p.	LB 2080 Kalakaua Owners LLC	33
	q.	Merit LLC	33
	r.	LB Somerset LLC and LB Preferred Somerset LLC	33
5.	Description of Debtors’ Principal Non-Debtor Affiliates		33
	a.	Lehman Brothers Inc.	33
	b.	Lehman Brothers Bankhaus AG (in Insolvenz)	33
	c.	Lehman Brothers Treasury Co. B.V.	33
	d.	Lehman Brothers Finance A.G. a.k.a. Lehman Brothers Finance S.A.	33
	e.	Lehman Brothers International (Europe)	33
	f.	LB I Group	34
	g.	Property Asset Management Inc.	34
6.	Directors and Executive Officers of LBHI		34
	a.	Directors	34
	b.	Executive Officers	35
7.	Capital Structure		36
	a.	Prepetition Short Term Borrowings	36
	b.	Prepetition Long-Term Borrowings	37
	c.	Prepetition Credit Facilities	38
	d.	Other Secured Borrowings	38
	e.	Bank Platforms	39
	f.	Preferred Stock	39
	g.	Common Stock	41
	h.	Trust Securities	41

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					Page
		8.	Liquidity Pool		41
IV.	EVENTS LEADING UP TO CHAPTER 11				42
V.	THE CHAPTER 11 CASES				44
	A.	Stabilization of the Business			45
		1.	Retention of A&M and Other Professionals		46
		2.	Creditors’ Committee		47
	B.	Lehman Brothers Inc.’s SIPA Proceeding; Lehman ALI			48
	C.	Sale of the North American Capital Markets and Investment Banking Business to Barclays Capital Inc.			49
	D.	Significant Developments During the Chapter 11 Case			52
		1.	Significant Asset Dispositions		52
			a.	Sale of Investment Management Division	52
			b.	Sale of European and Asian Assets and Businesses to Nomura	53
			c.	De Minimis Sale Order	54
		2.	Significant Settlements and Transactions		54
			a.	Settlement with the Pension Benefit Guaranty Corporation (“PBGC”)	54
			b.	Settlement with Lehman Brothers Bankhaus AG	54
			c.	Transaction with JPMorgan	55
		3.	Cross Border Insolvency Protocol		56
			a.	Summary of Material Terms of the Protocol	57
			b.	Meetings and Benefits of the Protocol	58
		4.	Appointment of Examiner		59
		5.	Employee Retention Programs		60
			a.	Retention and Recruitment Program	60
			b.	Derivatives Group Employees Incentive Plan	60
	E.	Administration of the Debtors’ Assets During the Chapter 11 Cases			61
		1.	Derivatives Contracts		61
			a.	Derivatives Protocols	61

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					Page
			b.	Key Litigation Relating to Derivative Contracts	64
			c.	Updated Information Regarding Derivative Contracts	65
		2.	Real Estate Assets		66
			a.	Real Estate Protocols Established by the Debtors	66
			b.	Significant Transactions/Restructurings/Sales	66
			c.	Updated Information Regarding the Debtors’ Real Estate Assets	69
		3.	Commercial Loans		69
			a.	Termination of Unfunded Commitment and Restructurings	69
			b.	Settlements of Prepetition Open Trades	70
			c.	Updated Information Regarding the Debtors’ Commercial Loan Portfolio	71
		4.	Bank Platforms		71
			a.	Transactions with Woodlands Commercial Bank	71
			b.	Transactions with Aurora Bank	72
			c.	Updated Information Regarding the Debtors’ Interest in the Banks	74
		5.	Private Equity/Principal Investments		74
			a.	Significant Transactions/Sales	74
			b.	Updated Information Regarding the Debtors’ Private Equity/Principal Investments	75
	F.	Adversary Proceedings			76
VI.	CLAIMS PROCESS AND BAR DATE				76
	A.	Schedules and Statements			76
	B.	Claims Bar Date			77
VII.	DEBTORS’ RELATIONSHIP WITH LEHMAN BROTHERS INC.				79
VIII.	INTERCOMPANY CLAIMS				79
IX.	LAMCO				80
X.	SUMMARY OF THE CHAPTER 11 PLAN				81
	A.	Considerations Regarding the Chapter 11 Plan			82

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				Page
	1.	Substantive Consolidation		82
	2.	Non-Substantive Consolidation of the Debtors		82
	3.	The Plan is a Fair Proposal to the Economic Stakeholders		83
B.	Rationale Underlying Plan Treatment of Claims			84
	1.	Economic Solutions With Respect To Third-Party Guarantee Claims and Affiliate Guarantee Claims		84
		a.	Third Party Guarantee Claims	85
		b.	Affiliate Guarantee Claims	87
	2.	Treatment of Intercompany Claims		89
C.	Classification and Treatment of Claims and Equity Interests			90
	1.	Treatment of Unclassified Claims		90
		a.	Administrative Expense Claims	90
		b.	Compensation and Reimbursement Claims	91
		c.	Priority Tax Claims	91
	2.	Summary of Classes		93
		a.	Treatment of Classified Claims Against and Equity Interests in LBHI	93
		b.	Treatment of Classified Claims Against and Equity Interests in the Subsidiary Debtors	96
D.	Means for Implementation of the Plan			98
	1.	Continued Corporate Existence of Debtors		98
	2.	Revesting of Assets		98
	3.	Plan Administrator		98
		a.	Authority of the Plan Administrator	98
		b.	Liability of Plan Administrator	99
		c.	Indenture Trustee and Creditors’ Committee Members Fees	100
	4.	Treatment of Disputed Claims		100
E.	Provisions Governing Distributions			101
	1.	Obligations to Make Distributions		101

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				Page
	2.	Post Petition Interest		101
	3.	Method of Distributions Under the Plan		101
		a.	In General	101
		b.	Distributions of Cash	101
	4.	Timing of Distributions		101
		a.	Distributions of Available Cash	101
		b.	Distributions on Claims After Allowance	102
		c.	Distribution Record Date	102
		d.	Time Bar to Cash Payment Rights	102
	5.	Unclaimed Distributions		102
	6.	Withholding and Reporting Requirements		103
	7.	Setoff and Recoupment		103
F.	Treatment of Executory Contracts and Unexpired Leases			103
	1.	Rejected Contracts and Leases of the Debtors		103
	2.	Assumed Contracts and Leases of the Debtors		104
	3.	Right to Modify Schedules of Assumed Contracts		104
	4.	Insurance Policies		104
	5.	Cure of Defaults		104
	6.	Bar Date for Filing Proofs of Claim Relating to Executory Contracts and Unexpired Leases Rejected Pursuant to the Plan		104
G.	Conditions Precedent to Plan’s Confirmation and Effective Date			105
	1.	Conditions to Confirmation of the Plan		105
	2.	Conditions to Effective Date		105
	3.	Waiver of Conditions		105
H.	Effect of Confirmation of the Plan			106
	1.	Release, Exculpation and Limitation of Liability		106
	2.	Injunction		106
	3.	Retention of Litigation Claims and Reservation of Rights		107
	4.	Terms of Injunctions or Stays		107
I.	Summary of Other Provisions of Plan			107

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				Page
		1.	Amendment or Modification of the Plan	107
		2.	Survival of Debtors’ Reimbursement Obligations of Officers and Directors	108
		3.	Allocation of Plan Distributions Between Principal and Interest	108
		4.	Maximum Distribution	108
		5.	Revocation or Withdrawal of the Plan	108
		6.	Dissolution of the Creditors’ Committee	109
		7.	Exemption from Transfer Taxes	109
		8.	Effectuating Documents and Further Transactions	109
		9.	Retention of Jurisdiction	109
		10.	Plan Supplement	110
	J.	Summary of Recovery Analysis Under the Plan		111
XI.	CONFIRMATION AND CONSUMMATION OF THE PLAN			111
	A.	Solicitation of Votes		111
	B.	The Confirmation Hearing		112
	C.	Confirmation		112
		1.	Acceptance	112
		2.	Unfair Discrimination and Fair and Equitable Tests	113
		3.	Feasibility	113
		4.	Best Interests Test	114
	D.	Consummation		116
XII.	CORPORATE GOVERNANCE AND MANAGEMENT OF THE DEBTORS ON THE EFFECTIVE DATE			117
	A.	Board of Directors and Management		117
		1.	Board of Directors	117
		2.	Management of the Debtors	117
		3.	Holders of the Stock of Debtors On Effective Date	117
		4.	Plan Administrator	117
		5.	Corporate Existence	118
		6.	Certificates of Incorporation and By-laws	118

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					Page
		7.	Wind-Down		118
		8.	Other Corporate Governance Matters		118
XIII.	SECURITIES LAWS MATTERS				119
XIV.	CERTAIN RISK FACTORS TO BE CONSIDERED				119
	A.	Certain Bankruptcy Law Considerations			119
	B.	Conditions Precedent to Consummation of the Plan			120
	C.	Asset Sales			120
	D.	Estimation of Allowed Claims			120
	E.	Certain Tax Considerations			120
XV.	CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN				121
	A.	Consequences to LBHI and Subsidiary Debtors			122
		1.	Tax Filing Status; Tax Attributes		122
		2.	General Discussion of Plan		123
			a.	Asset Dispositions	123
			b.	Plan Distributions	123
		3.	Tax Impact of the Plan on the Debtors		124
			a.	Cancellation of Debt	124
			b.	Limitation of NOL Carryforwards and other Tax Attributes	124
			c.	Non-U.S. Income Tax Matters	126
	B.	Consequences to Holders of Claims and LBHI Equity Interests			126
		1.	Realization and Recognition of Gain or Loss, In General		126
		2.	Holders of Allowed General Unsecured Claims (for LBHI, Classes 3, 4, 6, 7 and 8; for all other Debtors, Classes 3 and 4)		127
		3.	Allocation of Consideration to Interest		127
		4.	Withholding on Distributions, and Information Reporting		127
XVI.	ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN				128
	A.	Alternative Plan(s)			128
	B.	Liquidation under Chapter 7			129

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TABLE OF CONTENTS

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					Page
XVII.	VOTING PROCEDURES AND REQUIREMENTS				130
	A.	Ballots and Voting Deadline			130
	B.	Voting Procedures			131
	C.	Special Note for Holders of Notes Issued Directly by LBHI			132
		1.	Beneficial Owners		132
		2.	Nominees		132
			a.	Pre-Validated Ballots	133
			b.	Master Ballots	133
		3.	Securities Clearing Agencies		133
		4.	Miscellaneous		133
	D.	Fiduciaries and other Representatives			134
	E.	Parties Entitled to Vote			134
	F.	Agreements Upon Furnishing Ballots			135
	G.	Waivers of Defects, Irregularities, Etc.			135
	H.	Withdrawal of Ballots; Revocation			136
	I.	Further Information; Additional Copies			136
XVIII.	CONCLUSION AND RECOMMENDATION				138
Schedule A- Definitions

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Exhibits
Exhibit 1	Chapter 11 Plan
Exhibit 2A	Balance Sheets of Each Debtor, as of September 14, 2008
Exhibit 2B	Balance Sheets of Each Debtor, as of the Applicable Commencement Date
Exhibit 2C	Balance Sheets of Each Debtor, as of June 30, 2009
Exhibit 2D	Balance Sheets of Each Debtor, as of December 31, 2009 (To Be Provided When Issued)
Exhibit 3	Balance Sheets of Aurora Bank and Woodlands, as of December 31, 2009
Exhibit 4	Recovery Analysis for Each Debtor
Exhibit 5	Liquidation Analysis for Each Debtor
Exhibit 6	Debtors’ Estimates of Claims and Claims Data
Exhibit 7	Five-Year Cash Flow Estimates
Exhibit 8	Corporate Structure Charts of LBHI and its Subsidiaries
Exhibit 9	Significant Intercompany Balances
Exhibit 10	Third-Party Guarantee Class Maximum (Schedule 6 to the Plan)
Exhibit 11	Affiliate Third Derivative Liabilities
Exhibit 12	Foreign Administrators (Schedule 2 to the Plan)
Exhibit 13	Foreign Proceedings (Schedule 3 to the Plan)
Exhibit 14	Primary Obligors (Schedule 4 to the Plan)
Exhibit 15	Schedule 5 Affiliates (Schedule 5 to the Plan)

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I.INTRODUCTION

Lehman Brothers Holdings Inc. (“LBHI”) and certain of its direct and indirect subsidiaries, as debtors (collectively, the “Debtors”), submit this Disclosure Statement pursuant to section 1125 of title 11 of the United States Code (the “Bankruptcy Code”) to holders of Claims against and Equity Interests in the Debtors for (i) the solicitation of acceptances of each of the Debtors’ plans under Chapter 11 of the Bankruptcy Code, dated April 14, 2010, as the same may be amended (the “Plan”), filed by the Debtors with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) and (ii) the hearing to consider confirmation of the Plan (“Confirmation Hearing”) scheduled for [            ].  Unless otherwise defined herein, all capitalized terms contained herein have the meanings ascribed to them on Schedule A attached hereto.

The key Exhibits attached to this Disclosure Statement include:

·The Chapter 11 Plan (Exhibit 1)

·The Balance Sheets of each Debtor (i) as of September 14, 2008; (ii) as of the applicable Commencement Date for Each Debtor; (iii) as of June 30, 2009; and (iv) as of December 31, 2009, to be provided when issued (Exhibits 2A, 2B, 2C and 2D)

·The Recovery Analysis for Each Debtor (Exhibit 4)

·The Liquidation Analysis for Each Debtor (Exhibit 5)

·Debtors’ Estimates of Claims and Claims Data (Exhibit 6)

·Five-Year Cash Flow Estimates (Exhibit 7)

A Ballot for the acceptance or rejection of the Plan is enclosed with the Disclosure Statement mailed to the holders of Claims that the Debtors believe may be entitled to vote to accept or reject the Plan.

On     , 2010, after notice and a hearing, the Bankruptcy Court approved this Disclosure Statement as containing adequate information of a kind and in sufficient detail to enable a hypothetical investor of the relevant classes to make an informed judgment whether to accept or reject the Plan (the “Disclosure Statement Order”).  APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT, HOWEVER, CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT AS TO THE FAIRNESS OR MERITS OF THE PLAN.

The Disclosure Statement Order sets forth in detail, among other things, the deadlines, procedures and instructions for voting to accept or reject the Plan and for filing objections to confirmation of the Plan, the record date for voting purposes and the applicable standards for tabulating Ballots.  In addition, detailed voting instructions accompany each Ballot.  Each holder of a Claim entitled to vote on the Plan should read the Disclosure Statement, the Plan, the Disclosure Statement Order and the instructions

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accompanying the Ballots in their entirety before voting on the Plan.  These documents contain important information concerning the classification of Claims and Equity Interests for voting purposes and how the votes will be tabulated.  No solicitation of votes to accept or reject the Plan may be made except pursuant to section 1125 of the Bankruptcy Code.

II.OVERVIEW OF THE PLAN

For a more detailed description of the Plan, refer to section X—“Summary of the Chapter 11 Plan.”  In addition, the Plan is attached hereto as Exhibit 1.

A.Summary of the Plan

Prior to the commencement of the Chapter 11 Case by LBHI on September 15, 2008, Lehman constituted the fourth largest investment banking firm in the United States, which operated as a single globally integrated economic unit with its center of main interest at its New York City headquarters.  The Plan proposes an economic resolution of the Claims of creditors of all of the Debtors and incorporates resolutions of various inter-Debtor, Debtor-creditor and inter-creditor disputes designed to achieve a global and efficient resolution of the Claims and interests asserted in the Chapter 11 Cases.  The proposed Plan will expedite the administration of the Debtors’ Chapter 11 Cases, accelerate recoveries to creditors and avoid the potential enormous costs and extended time that would otherwise be incurred in connection with litigation of multifaceted and complex issues associated with these extraordinary cases.

The Plan separately applies to each of the Debtors and constitutes 23 distinct chapter 11 plans.  The Plan recognizes the corporate integrity of each Debtor and, therefore, Allowed Claims against a particular Debtor will be satisfied from the assets of that Debtor.

In developing the Plan, the Debtors considered whether substantive consolidation was appropriate for the resolution of the Debtors’ Chapter 11 Cases at this time.  Substantive consolidation of debtors’ estates is a judicially created equitable remedy pursuant to which the assets and liabilities of two or more entities are pooled, and the pooled assets are aggregated and used to satisfy the Claims of creditors of all the consolidated debtors as if only one debtor existed.  Substantive consolidation eliminates intercompany Claims, guarantee Claims against any consolidated entity that guaranteed the obligations of another consolidated entity, and any issues concerning the ownership of assets among the consolidated entities.  The Debtors’ management considered the manner in which the Debtors operated and interacted with each other and their Affiliates prior to the Commencement Date, the financial book-keeping for each Debtor and creditor reliance on the credit of a particular Debtor as opposed to Lehman as a single entity, among other relevant factors.  Substantive consolidation is dependent upon mixed questions of fact and law.  There are facts relating to the manner in which the Debtors operated their businesses that strongly support a finding that certain of the Debtors are susceptible to being substantively consolidated.  The Debtors’ management is also cognizant that (i) certain significant Affiliates are currently in insolvency proceedings in foreign jurisdictions, (ii) other significant Affiliates are regulated entities, and (iii) there exist potential difficulties in implementing a plan that substantively consolidated the Debtors with all or some of their Affiliates.  As a result, the

2

Debtors have elected, at this time, to propose the Plan which will treat claimants/creditors in an economic and fair manner.  Acceptance of the Plan will allow the avoidance of substantial, expensive and time consuming proceedings that may result from the pursuit of substantive consolidation.  However, if it appears that the Plan may not be accepted, the Debtors may elect to amend the Plan to provide for the substantive consolidation of all or certain of the Debtors and their Affiliates.  The Debtors’ management believes that any plan to substantively consolidate all or certain of the Debtors’ Chapter 11 Cases would be vigorously contested and would result in expensive and lengthy litigation that would delay any distributions to creditors for years.

The Plan strikes a balance between competing interests by recognizing the corporate integrity of each Debtor while including certain resolutions to alleviate the potential negative implications that may result from the indiscriminate enforcement of asserted Guarantee Claims.  The proposed Plan will expedite the administration of the Debtors’ Chapter 11 Cases and accelerate and expedite recoveries to creditors and avoid the potential enormous costs that would otherwise be incurred in connection with litigation of the numerous complex issues raised by these Chapter 11 Cases.

B.Classification, Treatment and Estimated Recovery for Each Class Under the Plan

The Claims asserted against each Debtor and Equity Interests in each Debtor are separated into Classes.  Generally, the classification structure of the Plan applicable to each of the Debtors is identical other than for LBHI, which includes additional Classes for senior and subordinated unsecured debt and Guarantee Claims filed by third-parties as well as Affiliates.  As it relates to LBHI (as set forth in detail below and in Section X.C.2.a— “Treatment of Classified Claims Against and Equity Interests in LBHI” of this Disclosure Statement), after payment in full in cash of administrative and priority creditors and the satisfaction in full of secured creditors in the manner provided in the Plan, the Plan proposes to distribute Cash to holders of Senior Unsecured Claims, General Unsecured Claims, Intercompany Claims and Guarantee Claims filed by Third-Parties and Affiliates in the amount of their Pro Rata Share, provided that the aggregate Allowed amount of Third-Party and Affiliate Guarantee Claims against LBHI for distribution purposes does not exceed $115,324 million.

To implement a cap on Guarantee Claims, the Plan distinguishes between Guarantee Claims filed directly by third-party creditors and Guarantee Claims filed by Affiliates.  Third-Party Guarantee Claims are separately classified on the basis of the identity of the Primary Obligor of the underlying Guarantee Claim.  The Plan incorporates a formula in the definition of “Permitted Third-Party Guarantee Claim” which is used to calculate a claimant’s Pro Rata Share of the maximum aggregate class Allowed amount.  The Permitted Third-Party Guarantee Claim will be calculated after the Allowed amount of such holder’s Guarantee Claim has been determined under the ordinary Claims reconciliation process.

Holders of Affiliate Guarantee Claims will have an aggregate Allowed Claim in the amount of $21,186 million.  The individual allocation for each Affiliate that has asserted a Guarantee Claim on any basis is not set forth in the Plan.  Rather, holders of Affiliate Guarantee Claims, by voting in favor of the Plan, will be voting in favor of the Plan’s proposed aggregate Allowed Claim,

3

and the process for allocating the Allowed Claim at a later date, as set forth below.  The Debtors intend to allocate the $21,186 million to holders of Affiliate Guarantee Claims on a pro rata basis based on the amount of each Affiliate’s Allowed Affiliate Guarantee Claim after evaluating the enforceability of the Claims.

An allocation will be proposed by the Plan Administrator within six months after the Effective Date.  The allocation will be subject to a vote of holders of Allowed Affiliate Guarantee Claims and will be binding on all such holders if the proposed allocation is accepted by holders of at least two-thirds in amount of Allowed Affiliate Guarantee Claims and more than one-half in number of holders of such Affiliate Guarantee Claims.  The Debtors will solicit votes to accept or reject the allocation by distributing ballots to the Affiliates.  Each Affiliate entitled to vote will be permitted to vote to accept or reject the allocation based on its Allowed Affiliate Guarantee Claim amount.  If such proposed allocation is not accepted in accordance with the foregoing, the allocation of the total $21,186 million shall be determined by the Bankruptcy Court.

As to each of the Subsidiary Debtors, the Plan adopts a common classification scheme.  The Plan proposes, after payment in full, in Cash of administrative and priority creditors and the satisfaction of secured creditors in full in the manner provided in the Plan, to distribute Cash to holders of General Unsecured Claims and Intercompany Claims in the amount of their Pro Rata Share.

Solely for illustrative purposes, the Debtors have analyzed estimated recoveries under the Plan based on a range of discount rates. This range was applied to the Debtors’ cash flow estimates for the recovery of distributable assets under the Plan.

4

Based on this analysis, estimated Plan recoveries for General Unsecured Claims against the following Debtors (whose estimated distributable assets on an undiscounted basis under the Plan collectively amount to approximately 75% of the total estimated undiscounted directly held assets1 of all Debtors and Debtor-Controlled Entities under the Plan), are as follows.2

Illustrative Plan Recoveries Under Different Discount Rates for Selected Debtors

	Discount Rate
	Undiscounted		6%		12%		18%
LBHI
General Unsecured Claims (Class 4)	14.7	%	12.9	%	11.5	%	10.4	%
LCPI
General Unsecured Claims (Class 3)	44.2	%	37.5	%	32.4	%	28.6	%
LBCS
General Unsecured Claims (Class 3)	26.8	%	26.4	%	26.1	%	25.8	%
LBSF
General Unsecured Claims (Class 3)	24.1	%	23.3	%	22.5	%	21.9	%

The Debtors have also estimated recoveries under both the Plan and a hypothetical liquidation at various discount rates. Based on this analysis, which incorporates the multitude of projections and assumptions used to project the total distributable assets available and the total Allowed Claims under the Plan and in a hypothetical liquidation, the Debtors estimate that at discount rates up to 25% the Plan is preferable for all Creditor classes in comparison to a hypothetical liquidation.

The following schedules detail recoveries to each class of creditors for each Debtor on an undiscounted cash flow basis.

(1) Includes all assets (Cash, Restricted Cash, real estate, loans, investments and derivatives) and excludes recoveries on Intercompany Claims, equity in affiliates and recoveries on Guarantee Claims from Lehman Brothers Holdings Inc.

(2) Recovery percentages shown represent the Debtors’ estimates of recoveries under the Plan divided by the Debtors’ estimate of Allowed Claims in each Class.

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SUMMARY OF CLASSIFICATION, TREATMENT AND ESTIMATED RECOVERY OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN

Lehman Brothers Holdings Inc. (“LBHI”)

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery3	Impairment; Entitlement to Vote
1	Priority Non-Tax Claims against LBHI	Payment in full, in Cash. Claims in Class 1 shall not receive post petition interest.	100%	Impaired, Entitled to Vote
2	Secured Claims against LBHI	At the option of LBHI: (i) payment in Cash in an amount equal to the Allowed amount of such Secured Claim on the later of the Effective Date and the date such Secured Claim becomes an Allowed Secured Claim; (ii) the sale or disposition proceeds of the Collateral securing such Allowed Secured Claim to the extent of the value of the Collateral securing such Allowed Secured Claim; (iii) surrender to the holder of such Allowed Secured Claim of the Collateral securing such Allowed Secured Claim; or (iv) such treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the Allowed Secured Claim is entitled.	100%	Impaired, Entitled to Vote
3	Senior Unsecured Claims against LBHI	Payment in Cash in the amount of (i) its Pro Rata Share of Available Cash from LBHI, and (ii) its Pro Rata Senior Unsecured Claim Share of Reallocated Distributions.	17.4%	Impaired, Entitled to Vote
4	General Unsecured Claims against LBHI	Payment in Cash of its Pro Rata Share of Available Cash from LBHI.	14.7%	Impaired, Entitled to Vote
5	Subordinated Unsecured Claims against LBHI	No Distribution (because such Distributions are automatically reallocated to Senior Unsecured Claims in accordance with the underlying agreements).	0%	Impaired, Not Entitled to Vote, Deemed to Reject
6	Intercompany Claims against LBHI	Payment in Cash of its Pro Rata Share of Available Cash from LBHI.	14.7%	Impaired, Entitled to Vote
7A	Third-Party Guarantee Claims for which LBSF is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7A will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7B	Third-Party Guarantee Claims for which LBCS is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7B will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote

(3) With respect to all Debtors: (i) where the recovery percentage is shown as “N/A,” the amount of estimated Claims in such Class is $0 and (ii) where 0% is shown, the Allowed Claims for such Class is less than $500,000.

6

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery(3)	Impairment; Entitlement to Vote
7C	Third-Party Guarantee Claims for which LBCC is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7C will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7D	Third-Party Guarantee Claims for which LOTC is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7D will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7E	Third-Party Guarantee Claims for which LBDP is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7E will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash. The Debtors estimate that the Clams in this Class will recover 100% of their Allowed Claim amounts from LBDP	N/A	Impaired, Entitled to Vote
7F	Third-Party Guarantee Claims for which LCPI is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7F will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7G	Third-Party Guarantee Claims for which LBIE is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7G will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7H	Third-Party Guarantee Claims for which LBL is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7H will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7I	Third-Party Guarantee Claims for which LBT is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7I will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7J	Third-Party Guarantee Claims for which Bankhaus is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7J will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote

7

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery(3)	Impairment; Entitlement to Vote
7K	Third-Party Guarantee Claims for which LB Finance is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7K will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7L	Third-Party Guarantee Claims for which LB Securities is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7L will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7M	Third-Party Guarantee Claims for which LBJ is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7M will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7N	Third-Party Guarantee Claims for which LBHJ is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7N will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7O	Third-Party Guarantee Claims for which Sunrise is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7O will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7P	Third-Party Guarantee Claims for which LBCCA is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7P will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7Q	Third-Party Guarantee Claims for which LBI is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7Q will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
7R	Third-Party Guarantee Claims for which a Schedule 5 Affiliate is the Primary Obligor on the corresponding Primary Claims	Each holder of a Claim in Class 7R will participate in recoveries under the Plan on the basis of its Permitted Third-Party Guarantee Claim. Each Permitted Third-Party Guarantee Claim will receive a Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote

8

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery(3)	Impairment; Entitlement to Vote
8	Affiliate Guarantee Claims against LBHI	Allowed Affiliate Guarantee Claims shall be Allowed in the aggregate amount of $21,186 million. Within a period of six months after the Effective Date, the Plan Administrator shall review and consult with holders of Affiliate Guarantee Claims as necessary and propose an allocation of $21,186 million to each holder of an Affiliate Guarantee Claim. If the proposed allocation is accepted by holders of at least two-thirds in amount of Allowed Affiliate Guarantee Claims and more than one-half in number of holders of such Allowed Claims within 30 days of the solicitation of such vote, such allocation shall be binding on all holders of Allowed Affiliate Guarantee Claims. If such proposal is not accepted, the allocation of the total $21,186 million among the holders of Allowed Affiliate Guarantee Claim shall be determined by the Bankruptcy Court. Each holder of an Allowed Affiliate Guarantee Claim against LBHI shall receive its Pro Rata Share of Available Cash.	14.7%	Impaired, Entitled to Vote
9	Equity Interests in LBHI	No Distributions (unless all other creditors have been paid in full). All Equity Interests will be cancelled and one new share of LBHI common stock will be issued to the Plan Administrator which will hold such share for the benefit of the holders of the former Equity Interests consistent with their former economic entitlement.	N/A	Impaired, Not Entitled to Vote, Deemed to Reject

Lehman Commercial Paper Inc. (“LCPI”)

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
1	Priority Non-Tax Claims against LCPI	Payment in full, in Cash Claims in Class 1 shall not receive post petition interest.	100%	Impaired, Entitled to Vote
2	Secured Claims against LCPI	At the option of LCPI: (i) payment in Cash in an amount equal to the Allowed amount of such Secured Claim on the later of the Effective Date and the date such Secured Claim becomes an Allowed Secured Claim; (ii) the sale or disposition proceeds of the Collateral securing such Allowed Secured Claim to the extent of the value of the Collateral securing such Allowed Secured Claim; (iii) surrender to the holder of such Allowed Secured Claim of the Collateral securing such Allowed Secured Claim; or (iv) such treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the Allowed Secured Claim is entitled.	100%	Impaired, Entitled to Vote
3	General Unsecured Claims against LCPI	Payment in Cash of its Pro Rata Share of Available Cash from LCPI.	44.2%	Impaired, Entitled to Vote

9

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
4	Intercompany Claims against LCPI	Payment in Cash of its Pro Rata Share of Available Cash from LCPI.	44.2%	Impaired, Entitled to Vote
5	Equity Interests in LCPI	No Distributions (unless all other holders of Allowed Claims against LCPI have been paid in full). Equity Interest shall remain in place until LCPI is dissolved.	N/A	Impaired, Not Entitled to Vote, Deemed to Reject

Lehman Brothers Commodity Services Inc. (“LBCS”)

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
1	Priority Non-Tax Claims against LBCS	Payment in full, in Cash Claims in Class 1 shall not receive post petition interest.	100%	Impaired, Entitled to Vote
2	Secured Claims against LBCS	At the option of LBCS: (i) payment in Cash in an amount equal to the Allowed amount of such Secured Claim on the later of the Effective Date and the date such Secured Claim becomes an Allowed Secured Claim; (ii) the sale or disposition proceeds of the Collateral securing such Allowed Secured Claim to the extent of the value of the Collateral securing such Allowed Secured Claim; (iii) surrender to the holder of such Allowed Secured Claim of the Collateral securing such Allowed Secured Claim; or (iv) such treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the Allowed Secured Claim is entitled.	100%	Impaired, Entitled to Vote
3	General Unsecured Claims against LBCS	Payment in Cash of its Pro Rata Share of Available Cash from LBCS.	26.8%	Impaired, Entitled to Vote
4	Intercompany Claims against LBCS	Payment in Cash of its Pro Rata Share of Available Cash from LBCS.	26.8%	Impaired, Entitled to Vote
5	Equity Interests in LBCS	No Distributions (unless all other holders of Allowed Claims against LBCS have been paid in full). Equity Interest shall remain in place until LBCS is dissolved.	N/A	Impaired, Not Entitled to Vote, Deemed to Reject

Lehman Brothers Special Financing Inc. (“LBSF”)

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
1	Priority Non-Tax Claims against LBSF	Payment in full, in Cash Claims in Class 1 shall not receive post petition interest.	100%	Impaired, Entitled to Vote

10

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
2	Secured Claims against LBSF	At the option of LBSF: (i) payment in Cash in an amount equal to the Allowed amount of such Secured Claim on the later of the Effective Date and the date such Secured Claim becomes an Allowed Secured Claim; (ii) the sale or disposition proceeds of the Collateral securing such Allowed Secured Claim to the extent of the value of the Collateral securing such Allowed Secured Claim; (iii) surrender to the holder of such Allowed Secured Claim of the Collateral securing such Allowed Secured Claim; or (iv) such treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the Allowed Secured Claim is entitled.	100%	Impaired, Entitled to Vote
3	General Unsecured Claims against LBSF	Payment in Cash of its Pro Rata Share of Available Cash from LBSF.	24.1%	Impaired, Entitled to Vote
4	Intercompany Claims against LBSF	Payment in Cash of its Pro Rata Share of Available Cash from LBSF.	24.1%	Impaired, Entitled to Vote
5	Equity Interests in LBSF	No Distributions (unless all other holders of Allowed Claims against LBSF have been paid in full).  Equity Interest shall remain in place until LBSF is dissolved.	N/A	Impaired, Not Entitled to Vote, Deemed to Reject

Lehman Brothers OTC Derivatives Inc. (“LOTC”)

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
1	Priority Non-Tax Claims against LOTC	Payment in full, in Cash Claims in Class 1 shall not receive post petition interest.	100%	Impaired, Entitled to Vote
2	Secured Claims against LOTC	At the option of LOTC: (i) payment in Cash in an amount equal to the Allowed amount of such Secured Claim on the later of the Effective Date and the date such Secured Claim becomes an Allowed Secured Claim; (ii) the sale or disposition proceeds of the Collateral securing such Allowed Secured Claim to the extent of the value of the Collateral securing such Allowed Secured Claim; (iii) surrender to the holder of such Allowed Secured Claim of the Collateral securing such Allowed Secured Claim; or (iv) such treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the Allowed Secured Claim is entitled.	100%	Impaired, Entitled to Vote
3	General Unsecured Claims against LOTC	Payment in Cash of its Pro Rata Share of Available Cash from LOTC.	18.3%	Impaired, Entitled to Vote
4	Intercompany Claims against LOTC	Payment in Cash of its Pro Rata Share of Available Cash from LOTC.	18.3%	Impaired, Entitled to Vote
5	Equity Interests in LOTC	No Distributions (unless all other holders of Allowed Claims against LOTC have been paid in full).  Equity Interest shall remain in place until LOTC is dissolved.	N/A	Impaired, Not Entitled to Vote, Deemed to Reject

11

Lehman Brothers Commercial Corporation (“LBCC”)

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
1	Priority Non-Tax Claims against LBCC	Payment in full, in Cash Claims in Class 1 shall not receive post petition interest.	100%	Impaired, Entitled to Vote
2	Secured Claims against LBCC	At the option of LBCC: (i) payment in Cash in an amount equal to the Allowed amount of such Secured Claim on the later of the Effective Date and the date such Secured Claim becomes an Allowed Secured Claim; (ii) the sale or disposition proceeds of the Collateral securing such Allowed Secured Claim to the extent of the value of the Collateral securing such Allowed Secured Claim; (iii) surrender to the holder of such Allowed Secured Claim of the Collateral securing such Allowed Secured Claim; or (iv) such treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the Allowed Secured Claim is entitled.	100%	Impaired, Entitled to Vote
3	General Unsecured Claims against LBCC	Payment in Cash of its Pro Rata Share of Available Cash from LBCC.	30.8%	Impaired, Entitled to Vote
4	Intercompany Claims against LBCC	Payment in Cash of its Pro Rata Share of Available Cash from LBCC.	30.8%	Impaired, Entitled to Vote
5	Equity Interests in LBCC	No Distributions (unless all other holders of Allowed Claims against LBCC have been paid in full).  Equity Interest shall remain in place until LBCC is dissolved.	N/A	Impaired, Not Entitled to Vote, Deemed to Reject

Lehman Brothers Derivatives Products Inc. (“LBDP”)

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
1	Priority Non-Tax Claims against LBDP	Payment in full, in Cash Claims in Class 1 shall not receive post petition interest.	100%	Impaired, Entitled to Vote
2	Secured Claims against LBDP	At the option of LBDP: (i) payment in Cash in an amount equal to the Allowed amount of such Secured Claim on the later of the Effective Date and the date such Secured Claim becomes an Allowed Secured Claim; (ii) the sale or disposition proceeds of the Collateral securing such Allowed Secured Claim to the extent of the value of the Collateral securing such Allowed Secured Claim; (iii) surrender to the holder of such Allowed Secured Claim of the Collateral securing such Allowed Secured Claim; or (iv) such treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the Allowed Secured Claim is entitled.	100%	Impaired, Entitled to Vote
3	General Unsecured Claims against LBDP	Payment in Cash of its Pro Rata Share of Available Cash from LBDP.	100%	Impaired, Entitled to Vote

12

Class	Type of Claim or Equity Interest	Treatment of Allowed Claims Under the Plan	Estimated Recovery	Impairment; Entitlement to Vote
4	Intercompany Claims against LBDP	Payment in Cash of its Pro Rata Share of Available Cash from LBDP.	100%	Impaired, Entitled to Vote
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