Declaration of K. Rehns in Support of Plaintiffs' Motion for - Lehman ...

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Case 1:09-md-02017-LAK Document 666-1 Filed 01/13/12 Page 33 of 74 factors, including: (i) when the Certificate was purchased or acquired; (ii) whether it was sold, and if so, when it was sold and for how much; and (iii) the value of the Certificate on its applicable “Date of First Suit” (as stated in the attached Table A). 1 36. The “Recognized Loss or Gain Amount” will be calculated solely on the outstanding “Face Value” (i.e., the principal amount) for each Certificate at the time of sale, or if not sold, on the applicable Date of First Suit (i.e., Authorized Claimants will not be allocated damages related to principal and interest payments they received). In each calculation of the Recognized Loss or Gain Amount, the Face Value Sold will be limited to 100% of the Face Value Purchased. 37. The percentage of the original aggregate principal balance that remains to be distributed in a mortgage-backed security is known as the “Factor.” A Certificate’s Factor will be calculated by the Claims Administrator as follows: Factor = outstanding aggregate principal balance divided by - original aggregate principal balance The Factor for each Certificate on the applicable Date of First Suit is stated in the attached Table A. 38. For each calculation of the Recognized Loss or Gain Amount below, the purchase price used for the calculation may not exceed the price at which the Eligible Certificate was offered to the public. Thus, if the actual purchase price exceeds the price at which the Eligible Certificate was offered to the public, the price at which it was offered to the public will be used as the purchase price. If the sales price or value at applicable Date of First Suit exceeds the purchase price, then the calculation will result in a Recognized Gain Amount for that Certificate. 1 As indicated in Table A, complaints concerning certain of the Offerings were filed on June 19, 2008, July 23, 2008 and February 23, 2009. 19
Case 1:09-md-02017-LAK Document 666-1 Filed 01/13/12 Page 34 of 74 If you have a Recognized Gain Amount for a Certificate, you will not receive a recovery in this Settlement for that Certificate. Paragraphs 39 through 41 also provide some examples of how Recognized Loss or Recognized Gain may be calculated in different circumstances. 39. Certificates Sold Prior To Date Of First Suit: For each Eligible Certificate sold prior to its applicable Date of First Suit, the Recognized Loss Amount or Gain is calculated as follows: Face Value sold x (Purchase price – sales price)/100) Example 1: Investor A purchased $100,000.00 Face Value of Certificate 39538AAA4 (GPMF 2006-AR5 A1A) on December 5, 2006. The purchase price was 100.00. On February 29, 2008 (prior to the applicable Date of First Suit), Investor A sold $90,000.00 Face Value of Certificate 94983FAA8. The sales price was 90.00. Investor A’s Recognized Loss Amount is calculated as follows: $90,000 x (100.00 – 90.00)/100 Investor A’s Recognized Loss Amount is $9,000.00. If a sale did not result in a complete disposition of an investor’s ownership in a particular Certificate (i.e., only a portion of the Certificate was sold), a Recognized Loss Amount, if any, related to the remaining portion of the Certificate will be calculated separately. 40. Certificates Sold On Or After Date Of First Suit: For each Eligible Certificate sold on or after its applicable Date of First Suit, the Recognized Loss Amount or Gain is calculated as follows: Face Value sold x (purchase price-sales price)/100) For Certificates sold on or after the applicable Date of First Suit, the sales price used to calculate the Recognized Loss Amount or Gain shall be the greater of: (i) the Eligible Certificate’s value on the applicable Date of First Suit (as reflected in Table A); or (ii) the sales price of the Eligible Certificate. 20
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