Official Committee of Unsecured Creditors

of Lehman Brothers Holdings Inc., et al.

Summary Report to Creditors

February 2010

DISCLAIMER: Except as otherwise indicated, the information

furnished herein is derived from publicly available sources and
does not reflect the view of the Official Committee of Unsecured
Creditors or its professionals, including Milbank, Tweed, Hadley
& McCloy LLP, Quinn Emanuel Urquhart & Sullivan, LLP, FTI
Consulting Inc., and Houlihan Lokey Howard & Zukin Capital,
Inc. Subject to the Stipulation and Agreed Order Between the
Debtors and the Committee Regarding Creditor Access to
Information Pursuant to 11 U.S.C §§ 105(a), 1102(b)(3)
and 1103(c) (the “Creditor Access Stipulation”) [Docket No.
498], the Committee does not guarantee or warrant the
accuracy, completeness, or current nature of the information
provided in this monthly report and shall not be liable for any
loss or injury arising out of or caused in whole or in part by the
acts, errors, or omissions of the Committee, whether negligent or
otherwise, in procuring, compiling, collecting, interpreting,
reporting, communicating, or delivering the information
contained herein. The information contained in this report is
furnished for informational purposes only and should not be
construed as legal advice on any subject matter. No party
reviewing this report should take or refrain from taking any
action based upon the content of this report without seeking
legal counsel on the particular facts and circumstances at issue
from an attorney licensed in the reviewing party’s jurisdiction.
 Table of Contents
Page

INTRODUCTION ......................................................................................................................... 1

I. CHAPTER 11 CASES....................................................................................................... 3
A. Use of Estate Assets............................................................................................... 3
B. Relief from Automatic Stay Motions..................................................................... 6
C. Retention of Professionals ..................................................................................... 8
D. Bar Date Issues ...................................................................................................... 9
E. Case Administration Issues.................................................................................. 10
F. Miscellaneous ...................................................................................................... 10

II. SIPA PROCEEDING....................................................................................................... 11

A. Relief from Stay Motions..................................................................................... 11
B. Executory Contracts............................................................................................. 12

III. ADVERSARY PROCEEDINGS..................................................................................... 12

A. Commencement of Adversary Proceeding: Lehman Brothers Holdings,
Inc. v. Jeffrey Soffer, Fontainebleau Resorts, LLC. (Adv. Proc. 10-02821)....... 12

i
INTRODUCTION

On September 15, 2008, and periodically thereafter (the “Petition Date”),

Lehman Brothers Holdings Inc. (“LBHI”) and certain of its affiliates (collectively, the
“Debtors” and together with their non-debtor affiliates, “Lehman”) filed voluntary
petitions for relief under chapter 11 of title 11 of the United States Code (as amended
from time to time, the “Bankruptcy Code”) in the United States Bankruptcy Court for the
Southern District of New York (the “Court”).

On September 16, 2008, the Debtors, Lehman Brothers Inc. (“LBI”), and
Barclays Capital Inc. (“Barclays”) entered into an asset purchase agreement for the
purchase and sale of LBI’s assets, three real properties, including the Debtors’
headquarters, and two data centers (collectively, the “Barclays Sale”).

On September 17, 2008, pursuant to section 1102 of the Bankruptcy Code,

the United States Trustee (the “U.S. Trustee”) appointed the Official Committee of
Unsecured Creditors (the “Committee”).1 In accordance with the relevant provisions of
the Bankruptcy Code, the Committee retained Milbank, Tweed, Hadley & McCloy LLP
as counsel; Quinn Emanuel Urquhart & Sullivan, LLP as special counsel; FTI Consulting
Inc. as financial advisor; and Houlihan Lokey Howard & Zukin Capital, Inc. as
investment banker, in each case, to assist and represent the Committee in performing its
statutory duties.

On September 19, 2008, a proceeding under the Securities Investor

Protection Act of 1970 (the “SIPA Proceeding”) was commenced against LBI. James W.
Giddens (the “SIPA Trustee”) was appointed to administer the SIPA Proceeding.

On September 20, 2008, the Court approved the Barclays Sale and entered
concurrent orders to that effect in the Debtors’ chapter 11 cases (the “Chapter 11 Cases”)
and in the SIPA Proceeding.

On March 12, 2009, the Court granted Lehman Brothers Finance AG a/k/a
Lehman Brothers Finance SA (“LBF”), a wholly owned non-Debtor subsidiary of LBHI
subject to bankruptcy proceeding in Switzerland, recognition as a foreign main
proceeding under chapter 15 of the Bankruptcy Code and dismissed LBF’s pending
chapter 11 case.

1
The following Committee members were initially appointed: Wilmington Trust
Company; The Bank of New York Mellon; Shinsei Bank, Limited; Mizuho Corporate
Bank, Ltd.; The Royal Bank of Scotland, PLC; Metlife; and RR Donnelley & Sons.
Pursuant to the Third Amended Appointment of Official Committee of Unsecured
Creditors filed by the U.S. Trustee on February 9, 2010 [Docket No. 7034], the
Committee currently consists of the following seven members: Wilmington Trust
Company; The Bank of New York Mellon; Elliott Management Corp.; Mizuho Corporate
Bank, Ltd.; Metlife; The Vanguard Group Inc.; and U.S. Bank, National Association.

1
 On May 22, 2009, the Court granted Lehman Brothers Bankhaus AG
(“Bankhaus”), a wholly owned non-Debtor subsidiary of LBHI subject to an insolvency
proceeding in Germany, recognition as a foreign main proceeding under chapter 15 of the
Bankruptcy Code.

On September 24, 2009, the Court granted Lehman Re, Ltd., a wholly
owned non-Debtor subsidiary of LBHI subject to a compulsory winding up proceeding in
Bermuda, recognition as a foreign main proceeding under chapter 15 of the Bankruptcy
Code.

The following report has been prepared by the Committee in accordance with the
Committee’s obligation to share information with the Debtors’ unsecured creditors
pursuant to section 1102(b)(3) of the Bankruptcy Code, as well as the Creditor Access
Stipulation [Docket No. 498]. This report summarizes the motions resolved during the
month of February 2010 in both the Chapter 11 Cases and the SIPA Proceeding, as well
as the adversary proceedings commenced during such period.

2
I. CHAPTER 11 CASES

A. Use of Estate Assets

(i) Motion of Lehman Brothers Holdings Inc. Pursuant to Section 105(a)

of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure
9019 for Authority to Compromise Certain Claims Pursuant to Deed
in Lieu of Foreclosure Agreement [Docket No. 6714]

The Debtors sought authority to enter into a global settlement (the “Global
Settlement”) with respect to certain property (the “Property”) located in Stamford,
Connecticut consisting of a building (the “Building”) and the land appurtenant thereto
(the “Land”).

Stamford Associates, L.P. (“SALP”) leased the Land under a ground lease
from a subsidiary of the General Re Corporation (“Gen Re”) and had a fee title to the
Building (which it had purchased from Gen Re). Another Lehman entity, Stamford Real
Estate Corporation (“SREC”) subleased the Land and leased the Building from SALP,
and then subleased the Land and the Building back to Gen Re. Another Lehman entity,
Stamford Investment Partners (“SIP,” together with SREC and LBHI, the “Lehman
Entities”) provided financing in connection with these transactions. LBHI provided a
guarantee of certain of SREC’s obligations under the above leases and subleases (the
“LBHI Guaranty”) and a related tax indemnity (the “Tax Indemnity”).

Ninety-three percent of the limited partnership interests in SALP were

syndicated to Security Pacific Capital Leasing Corporation (“SPCLC,” and together with
SALP the “Stamford Entities”) for $43 million, with the remaining seven percent
syndicated to several dozen individual limited partners, including those owned by certain
former Lehman employees. The Stamford Entities filed two proofs of claim against
LBHI on account of the LBHI Guaranty and the Tax Indemnity (the “Proofs of Claim”)
in the aggregate amount of $416,353,324.71.

The financing provided by SIP consisted of a loan, evidenced by a $26

million face amount Deferred Interest Subordinated Note Due 2020 and secured under a
Second Mortgage and Security Agreement (the foregoing, collectively, the “Loan
Documents”).

Gen Re vacated the Property when its sublease expired on January 31,
2009. Assuming a replacement tenant is not found, SREC will have no source of funding
its obligations to SALP under the master lease, thereby triggering the LBHI Guaranty,
and SALP will have no source of funding to make the debt service payments to SIP under
the Loan Documents when they become due.

In an effort to avoid the expense and delays of litigation, the Stamford

Entities – which are now wholly owned and controlled by Bank of America – and the

3
Lehman Entities negotiated the Global Settlement, pursuant to which the parties agreed
that: (i) SALP would convey its fee interest in the Building and its interests under the
ground lease and the master lease to a newly formed subsidiary of SIP in consideration
for, among other things, the release of the Stamford Entities from all of their obligations
under the Loan Documents, the ground lease, and the master lease; (ii) the Proof of Claim
with respect to the LBHI Guaranty would be allowed as a general unsecured claim
against LBHI in the amount of $45 million solely for the benefit of SPCLC (i.e. to the
exclusion of any individual limited partners who may have been former Lehman
employees); (iii) the Proof of Claim with respect to the Tax Indemnity would be allowed
as a general unsecured claim against LBHI in the amount of $20 million solely for the
benefit of SPCLC (again, to the exclusion of any individual limited partners who may
have been former Lehman employees); (iv) any rights that the Stamford Entities had
under the LBHI Guaranty and the Tax Indemnity would be extinguished; and (v) the
Lehman Entities would provide releases to the Stamford Entities.

Disposition: The Court granted this motion. [Docket 7222]

(ii) Debtors’ Motion Pursuant to Section 363 of the Bankruptcy Code and
Bankruptcy Rule 6004 for Authorization to Prepay Variable Funding
Trusts [Docket No. 6713]

The Debtors sought authority to prepay certain notes (the “Notes”) issued
by two securitization trusts, Variable Funding Trust 2007-1 (“VFT 2007”) and Variable
Funding Trust 2008-1 (“VFT 2008,” and, together with VFT 2007, the “Trusts”) that
were due to mature on June 30, 2010. The Metropolitan Life Insurance Company
(“MetLife”) was the holder of the Notes, while Lehman Commercial Paper Inc. (“LCPI”)
had the right to receive any residual interest in the Trusts after repayment of the Notes.

VFT 2007 issued the “2007 Notes” that were secured by certain mortgage
loans sold by LCPI to VFT 2007. The Debtors represented that approximately $258.8
million was outstanding under the 2007 Notes. VFT 2008 issued the “2008 Notes” that
were secured by participations in certain corporate loans (together with the mortgage
loans securing the 2007 Notes, the “Collateral”), sold by LCPI to VFT 2008. The
Debtors represented that approximately $134.9 million was outstanding under the 2008
Notes. Additionally, the Debtors represented that the Notes were cross-collateralized and
guaranteed by LBHI.

Earlier in the Chapter 11 Cases, the Bankruptcy Court approved a

settlement between LCPI and MetLife (the “MetLife Settlement”) pursuant to which the
maturity date of the 2008 Notes was extended to June 30, 2010, and the maturity date of
the 2007 Notes was extended to December 31, 2009 (which could be further extended to
June 30, 2010 if certain conditions were met). Additionally, the interest rate on the 2007
Notes was increased as of January 1, 2010, from LIBOR plus 450 basis points to LIBOR
plus 700 basis points (the “January Rate Adjustment”). The interest rate of the 2008
Notes remained at LIBOR plus 450 basis points.

4
 According to the Debtors, the principal and interest payments received by
LCPI on account of the Collateral exceeded the amounts owed to MetLife under the
Notes for the first three quarters of 2009. However, due to the January Rate Adjustment,
a shortfall of approximately $4 to $6 million was created. The Debtors estimated that by
the June 30 maturity date, approximately $10 million will accrue under the 2007 Notes
and $2.7 million will accrue under the 2008 Notes.

Disposition: The Court granted this motion (the Committee represented to the Court
that MetLife recused itself from all Committee deliberations with respect to this
matter.) [Docket No. 7220]

(iii) Stipulation and Order Modifying Adequate Protection Stipulation

with Sumitomo Mitsui Banking Corporation (“SMBC”) [Docket No.
6813]

As of the relevant petition dates, LBHI, LCPI and SMBC were parties to a
loan and security agreement (the “Credit Agreement”) pursuant to which SMBC made
loans and extensions of credit to LBHI for the funding of LCPI. LCPI granted SMBC a
security interest in, among other things, certain financial assets (the “Pledged Assets”).

SMBC contended that, under the Credit Agreement, it had the right, upon
any event of default, to (i) dispose of any part of its collateral in any commercially
reasonable manner and (ii) apply all proceeds thereof against LBHI’s obligations (the
“Obligations”). As of January 12, 2010, the principal amount outstanding under the
Credit Agreement was $134,913,621.19.

Earlier in the Chapter 11 Cases, SMBC sought relief from the automatic
stay to proceed with the disposition of its collateral, and the Court, on December 17,
2008, so ordered a stipulation among the Debtors and SMBC granting SMBC adequate
protection [Docket No. 27]. Thereafter, the Court approved a stipulation granting further
adequate protection to SMBC, pursuant to which the Debtors agreed to transfer certain
loans to SMBC [Docket No. 4007].

In accordance with the terms of the prior stipulations, the Debtors have
consulted with SMBC regarding the management of the Pledged Assets. As a result of
such consultation, the Debtors and SMBC (a) determined that it was appropriate for the
Debtors to sell $10 million in principal amount of certain debt (the “TXU Loan”) and
apply the proceeds to reduce the amount of the Obligations, and (b) agreed upon terms
for the transfer to SMBC the principal amount of $40 million of another loan (the
“Altegrity Loan”) in exchange for a further reduction in the Obligations.

Pursuant to this new stipulation, the Debtors and SMBC agreed to

additional terms, whereby the Debtors were authorized to (a) sell $10 million in principal
amount of a certain loan and pay the net proceeds to SMBC, (b) transfer all of their rights
under another loan (in the principal amount of $40 million) to SMBC, and (c) sell other

5
Pledged Assets at prevailing market prices and pay the net proceeds to SMBC to be
applied to reduce the Obligations.

Disposition: The Court entered this stipulation. [Docket No. 7045]

(iv) Supplemental Stipulation, Agreement and Order Appointing Lehman

Brothers Holdings Inc. as Agent Under Loan Facility [Docket No.
7001]

LBHI and Kapalua Bay, LLC (“Kapalua”) were parties to a prepetition

Construction Loan Agreement (the “Original Construction Loan Agreement”) pursuant to
which LBHI agreed to lend $370,000,000 to Kapalua. LBHI also served as the
administrative agent thereunder.

On October 23, 2008, Kapalua filed a motion seeking an order compelling

LBHI to assume or reject the Original Construction Loan Agreement. On November 24,
2008, Central Pacific Bank (“Central Pacific”), Deutsche Hypothekenbank Actien-
Gesellschaft, and Landesbank Baden-Würrtemberg (collectively, the “Non-LBHI
Lenders”) filed a motion seeking relief from the automatic stay to remove LBHI as the
agent under the Original Construction Loan Agreement.

To resolve both motions consensually, the Debtors, Kapalua, the Non-

LBHI Lenders and Swedbank AB, New York Branch stipulated (the “Stipulation”) that
(i) the terms of the Original Construction Loan Agreement would be modified, (ii) LBHI
would assume its obligations under the Original Construction Loan Agreement, as
modified, and (iii) Central Pacific would replace LBHI as agent. The Stipulation was so
ordered by the Court on January 28, 2009, and, on February 11, 2009, the parties entered
into an Amended and Restated Construction Loan Agreement (the “Amended
Construction Loan Agreement”) implementing the foregoing.

On December 7, 2009, Central Pacific served notice on the parties of its

resignation as the agent. Accordingly, under this Supplemental Stipulation, the parties
requested that LBHI be appointed the agent under the Amended Construction Loan
Agreement.

Disposition: The Court entered this supplemental stipulation. [Docket No. 7221]

B. Relief from Automatic Stay Motions

(i) Motion for Relief from Stay to Effect Setoff [Docket No. 4963]

The California Public Employees’ Retirement System (“CalPERS”)

sought entry of an order for relief from the automatic stay to effect a setoff of a debt (the
“Swap Termination Amount”) that it owed to Lehman Brothers Special Financing Inc.

6
(“LBSF”) under a swap agreement against a prepetition claim (the “Bond Claim”) that
CalPERS asserted against LBHI on account of certain unsecured bonds issued by LBHI.

CalPERS and LBSF were parties to an ISDA Master Agreement (the

“Master Agreement”). LBHI served as a credit support provider under the Master
Agreement, and a bankruptcy filing by either LBSF or LBHI constituted an Event of
Default thereunder.

On or around September 19, 2008, CalPERS sent a notice to LBSF of

termination of the Master Agreement predicated on LBHI’s bankruptcy filing. CalPERS
calculated that it owed LBSF the Swap Termination Amount of $17,173,892.83, plus
interest (CalPERS asserted that the parties agreed on this amount, but disagreed as to the
calculation of the applicable interest).

The Master Agreement allowed LBSF and CalPERS to exercise setoff

rights with respect to termination payments. CalPERS asserted that, pursuant to section
553(a) the Bankruptcy Code, it was entitled to set off the Swap Termination Amount
against the Bond Claim. In addition to relief from the automatic stay to effect the setoff,
CalPERS also requested an award of attorneys’ fees for expenses incurred in bringing the
motion.

Disposition: The Court denied this motion without prejudice. [Docket No. 7049]

(ii) Stipulation, Agreement and Order Granting Limited Relief from the
Automatic Stay [Docket No. 6812]

LBHI sought entry of a stipulation, whereby it agreed to modify the

automatic stay to permit LNR Partners, Inc. (“LNR”) to exercise the rights and remedies
of the lender (the “Senior Lender”), on whose behalf LNR acted as special servicer, with
respect to an alleged default by Stellar Haverhill, LLC (the “Borrower”) under a loan
agreement (the “Senior Loan”) in the principal outstanding amount of $45,610,000,
secured by certain collateral (the “Senior Collateral”) consisting, among other things,
certain real property known as Haverhill Apartments (the “Property”). According to
LNR, the Borrower defaulted on the Senior Loan, triggering LNR’s right to foreclose on
the Senior Collateral.

In connection with the development of the Property, LBHI had provided

senior and junior mezzanine loans (the “Mezzanine Loans”) in the aggregate principal
amount of $12,930,075 to the entities (the “Mezzanine Borrowers”) that indirectly owned
the Property (and whose equity had been pledged to LBHI to secure the Mezzanine
Loans.

Pursuant to an intercreditor agreement to which LBHI and LNR are parties

(the “Intercreditor Agreement”), LBHI’s rights, title and interest in the Senior Collateral
were subordinated to those of LNR.

7
 Pursuant to the terms of the Intercreditor Agreement, the Lender provided
LBHI with notice of default and an opportunity to cure or purchase the Senior Loan.
LBHI did not exercise either option. The parties entered into this stipulation in order to
resolve any issues that may arise in connection with LNR’s exercise of its rights and
remedies with respect to the Borrower’s alleged defaults.

Pursuant to the stipulation, the parties agreed that the automatic stay
would be modified solely to (i) permit LNR to exercise the Senior Lender’s rights under
the Senior Loan, including foreclosing on the Senior Collateral and appointing a receiver
to take control of the Property pending a foreclose sale; and (ii) deem permitted and
effective all notices provided by LNR to LBHI on behalf of the Senior Lender and all
actions taken in connection therewith. Further, LNR agreed to provide LBHI with at
least ten days advance notice of any pending foreclosure sale of the Property.

Disposition: The Court entered this stipulation. [Docket No. 7219]

C. Retention of Professionals

(i) Fourth Supplemental Application of the Debtors Pursuant to Sections

327(e) and 328(a) of the Bankruptcy Code and Rule 2014 of the
Federal Rules of Bankruptcy Procedure for Authorization to Employ
and Retain Jones Day as Special Counsel to the Debtors, Nunc Pro
Tunc to the Engagement Date [Docket No. 6750]

The Debtors sought to expand the scope of Jones Day’s retention to

include legal services with respect to the following matters (the “Additional Matters”),
nunc pro tunc to November 13, 2009 (the “Engagement Date”): (i) representation of the
Debtors in connection with the workout and/or restructuring of certain loans/investments
in the Debtors’ commercial loan portfolio (the “Loan Portfolio”) and private equity/
principal investments portfolio (the “Investment Portfolio”) involving Greenbriar
Minerals LLC; and (ii) such other matters relating to the Loan Portfolio and/or
Investment Portfolio as may be requested by the Debtors. The Loan Portfolio is valued at
approximately $13.2 billion, and the Investment Portfolio is valued at approximately $2.3
billion.

Jones Day repeated its previous conflict check and clearance process with
respect to the Additional Matters, and informed the Debtors that it did not represent or
hold any interest adverse to the Debtors or their estates with respect to the Additional
Matters.

Disposition: The Court approved this supplemental application. [Docket No. 7166]

(ii) Debtors’ Application to Employ The O’Neil Group as Tax Services

Advisors Nunc Pro Tunc to the Engagement Date [Docket No. 6798]

8
 The Debtors sought to employ The O’Neil Group (“O’Neil”) is tax
services provider for the filing of tax returns for the 2009 and subsequent filing years.
The Debtors previously employed Huron Consulting Group (“Huron”) to provide the
same services for the 2008 filing year, pursuant to a March 12, 2009 order of the Court
[Docket No. 3072]; however, Huron informed the Debtors that it would no longer be
providing tax services. The Debtors submitted that their tax department did not have the
resources to prepare the necessary returns in-house, and sought to replace Huron’s
services with those of O’Neil.

O’Neil specializes in corporate tax compliance and accounting-related

services in the ordinary course and in restructuring environments for public and private
companies. Key members of O’Neil provided international and state income tax
compliance services for the Debtors for the 2008 compliance period, as members of
Huron. Therefore, the Debtors stated that O’Neil had a strong knowledge and
understanding of the Debtors’ tax department’s systems, processes, and management.

The Debtors proposed to compensate O’Neil at a single blended rate of

$180 per hour for the services (the “Services”) contemplated in the parties’ January 6,
2010 engagement letter. For related services beyond those Services described, the
Debtors proposed to compensate O’Neil at the following reduced hourly rates: (i) Tax
Managing Director: $325; (ii) Tax Director: $225; (iii) Tax Manager: $165; and (iv) Tax
Associate: $125. If further assistance is needed, the parties will agree on the additional
scope and rates. The Debtors also agreed to indemnify O’Neil for all damages except
those resulting from O’Neil’s own bad faith, self-dealing, breach of fiduciary duty, gross
negligence, or willful misconduct.

O’Neil has estimated that Services would require approximately 10,000

hours to complete. Given that the Services are repetitive and require substantial blocks of
uninterrupted time, the Debtors requested that O’Neil be allowed to maintain detailed
time records to the nearest quarter-hour instead of the nearest tenth-of-an-hour.

Disposition: The Court granted this application. [Docket No. 7044]

D. Bar Date Issues

(i) Stipulation, Agreement and Order between Lehman Brothers

Holdings Inc. and Certain Individual Foreign Creditors Deeming
Proofs of Claims Received After the Applicable Bar Date to be Timely
Filed [Docket No. 6916]

By an order dated July 2, 2009 (the “Bar Date Order”), the Court
established November 2, 2009 as the deadline (the “Securities Programs Bar Date”) for
filing proofs of claim based on “Lehman Programs Securities.” In accordance with the
Bar Date Order, Salvatore Facella Sensi Della Penna, Franco Mura and Luigi Isola, each
a holder of Lehman Programs Securities and residing outside the United States

9
(collectively, the “Foreign Creditors”), obtained blocking numbers, completed proofs of
claim (each a “Foreign Claim”) and mailed them via first class mail. Each Foreign Claim
was postmarked prior to the Securities Programs Bar Date. According to the Debtors,
however, the Foreign Claims were not delivered to the Debtors’ claims agent (the
“Claims Agent”) until after the Securities Programs Bar Date had passed.

After reviewing the circumstances surrounding the delayed receipt of the

Foreign Claims, the Debtors believed that the Foreign Creditors demonstrated excusable
neglect. Accordingly, the Debtors stipulated that the Foreign Claims would be deemed to
have been timely filed.

Disposition: The Court entered this stipulation. [Docket No. 7050]

E. Case Administration Issues

(i) Debtors’ Motion, Pursuant to Bankruptcy Rule 1007(c), for Second

Extension of the Time to File Merit LLC’s and the Somerset Entities’
Schedules, Statements of Financial Affairs and Related Documents
[Docket No. 6770]

The Debtors asked the Court to extend the time to file the schedules,
statements of financial affairs and related documents (collectively, the “SOFAs”) for LB
Somerset LLC, LB Preferred Somerset LLC, and Merit, LLC (collectively, the “New
Debtors”) through and including February 12, 2010, without prejudice to the New
Debtors’ right to seek additional extensions, for cause, if necessary.

The Debtors asserted that cause existed to further extend the time by
which the New Debtors had to file their SOFAs, citing the relatively short length of
additional time requested, the wide dispersion of information that had to be compiled and
cross-referenced, and the lack of employees with direct knowledge of the New Debtors’
books and records.

Disposition: The Court granted this motion. [Docket No. 6991]

F. Miscellaneous

(i) Ex Parte Motion for Leave to File the Examiner’s Report Temporarily
Under Seal [Docket No. 7022]

The Examiner moved ex parte to file the 2,200 page report of his
investigations (the “Report”) under seal (the “Motion to Seal”). In the Motion to Seal,
the Examiner stated that while the Report should be publicly available, he initially
requested that it be filed under seal because the Report contains a substantial amount of
privileged and confidential information (the “Protected Information”) that was obtained
pursuant to protective orders and confidentiality agreements with certain parties-in-

10
interest (the “Protected Parties”). According to the Examiner, the Protected Information
was so extensively “quoted, paraphrased or otherwise divulged” that it was not practical
to file a redacted version of the Report.

The Examiner contemporaneously filed a motion to unseal the Report (the

“Motion to Unseal”) in which he asked the Court to address the confidentiality and
privilege issues with respect to the Protected Information. In the Motion to Unseal, the
Examiner noted that he had begun contacting the Protected Parties to obtain their consent
to unseal the Report and that he planned to continue working with the Protected Parties to
address any of their concerns over the disclosure of the Protected Information.

Disposition: The Court granted this motion. [Docket No. 7024]

II. SIPA PROCEEDING

A. Relief from Stay Motions

(i) Stipulation and Order Modifying the Automatic Stay in Part to

Permit the Filing and Prosecution of Motion for an Order Pursuant to
Bankruptcy Code Sections 105, 363 And 1146(A) and Bankruptcy
Rules 2002, 6004, 9014 and 9019 Approving and Authorizing: (I)(A)
the Sale, Assignment and Transfer of Limited Liability Company
Interest of Broadhollow Funding LLC (“Broadhollow”); and (B) the
Sale, Assignment and Transfer of Limited Liability Company Interest
of Melville Funding LLC; (II) Settlement of Claims, Releases and
Waivers; (III) Release of Certain Escrow Funds; and (IV) Granting
Related (the “Motion”) Relief in the United States Bankruptcy Court
for the District of Delaware (the “Delaware Court”) [Docket No. 2605]

LBI had filed a proof of claim (the “LBI Claim”) in the chapter 11 cases
of American Home Mortgage Holdings, Inc. and certain of its affiliates (collectively, the
“AHM Debtors”) pending in the Delaware Court in the amount of $3,956,604.41. The
LBI Claim was based on (i) a prepetition agreement with one of the AHM Debtors and
(ii) LBI’s ownership of certain notes issued by Broadhollow (the “Broadhollow Notes”),
for which one of the AHM Debtors was the sole member, manager and owner.

The Motion filed by the AHM Debtors in the Delaware Court seeks, in
part, authorization to sell Broadhollow and effect a settlement among the AMH Debtors,
the holders of the Broadhollow Notes and other parties. Due to the automatic stay in
effect in the SIPA Proceeding, the prosecution of the Motion with respect to LBI was
stayed. Accordingly, the SIPA Trustee sought entry of a stipulation to agree to the
modification of the automatic stay to allow the AHM Debtors to prosecute the Motion to
the extent that the sales and releases contemplated thereby affect the rights of LBI.

Disposition: The Court entered this stipulation. [Docket No. 2672]

11
 B. Executory Contracts

(i) Stipulation and Order in Connection with the Termination of an

Engagement Letter with TPF II, L.P. (“TPF”) [Docket No. 2639]

The SIPA Trustee asked the Court to so order a stipulation among LBI,
TPF and Tenaska Capital Management, LLC (“Tenaska”) that provided for the
termination of an engagement letter dated April 3, 2007 (as amended on June 13, 2008,
the “Agreement”) under which TPF retained LBI as its exclusive global placement agent
in connection with the sale of limited partnership interest or other interests in TPF. The
SIPA Trustee determined that it would be in the best interests of LBI and the LBI estate
to terminate the Agreement upon the payment to the SIPA Trustee of a termination fee of
$11,303,337.55, which represented the agreed liquidated balance under the Agreement.

Disposition: The Court entered this stipulation. [Docket No. 2682]

III. ADVERSARY PROCEEDINGS

A. Commencement of Adversary Proceeding: Lehman Brothers

Holdings, Inc. v. Jeffrey Soffer, Fontainebleau Resorts, LLC. (Adv.
Proc. 10-02821)

LBHI commenced an adversary proceeding against Jeffrey Soffer and

Fontainebleau Resorts, LLC (“FRL” and, collectively with Soffer, the “Defendants”) to
recover on three guaranties (the “Guaranties”) executed by the Defendants in connection
with a loan agreement (the “Loan Agreement”) among various subsidiaries of FRL, as
borrowers (the “Borrowers”) and Lehman entities. According to LBHI, the Guaranties
were absolute and unconditional and provided, among other things, that the lenders could
seek full repayment of the outstanding balance on the Loan Agreement if the Borrowers
filed for bankruptcy.

The Borrowers filed for bankruptcy on June 9, 2009, and LBHI is seeking to
enforce the Guaranties on behalf of the lenders, and to recover damages, attorneys fees,
costs, and expenses.

12