Hayman Advisors LPWeighing in on commodities, sovereign debt and Greece & Japan, with Kyle Bass, Hayman Capital Management. Also, CNBC’s Kate Kelly has the latest details from London hedge fund, Brevan Howard.

going to get to right after this. we’re back with the strategy session. a couple of days ago the wall street journal ran a story detailing a hedge fund manager john john paulson was making quite a bit of money snapping up the distressed debt of the old l lehman brothers. it it appears that the bankruptcy of lehman is another opportunity. there is another side to the story, however, and it involves what is a growing rift between bondholders of the old lehman brothers. in fact, it pits our guest, kyle bass, against john paulson. kyle, i have a letter that you had sent out to your clients that made its way around already yesterday focusing people on the lehman bankruptcy, the largest bankruptcy of all time, fees paid out astonishing, $1.2 billion in various advisers. you focus on a particular credit issued by lehman to individual investors, most based in europe and not in the u.s. who you feel to put it bluntly are getting completely screwed. correct. when you look at this bankruptcy, it’s 270 billion of claims. it is fees of a billion. we think recoveries are 55 to 60 billion. when you think of cents on the dollar to what lehman was about, it’s about a quarter of just the debt, the senior secured debt. but what’s interesting, when you look at what’s going on, our creditor class is — if you remember the structured notes — do you remember when the private banks call up and say we want a principal-protected note, 60% of the upside of the s&p and make your principal protected over five years. it’s really safe. they sold 34 billion of these notes, and they funded lehman internally with those proceeds. those people were 300,000 plus creditors and they don’t have a collective voice on the creditors committee. why not? that’s a great question. when the committee was put together, there wasn’t a seat for them. they’re the largest single claimant, is that right? no, they’re not. they’re one of the largest, certainly. they’re one of the largest single claimants. what’s interesting is as we go through the process, you realize that our country is based on this foundation of the rule of law, and you invest in a company because there’s a capital structure. what’s happening here is the capital structure is being redrawn in the bankruptcy by the big funds with the advisers who, i think, have too close of a relationship. you bring up strong words in your letter. you white these elite hedge funds that appear to have a cozy relationship with the restructuring adviser in this case. this is dpr your letter. they worked together in the past and expectations to work together in the future. we can only speculate why they believe they’re entitled to bend and possibly break the long-established reputation of seniority that comes with purchasing senior bonds, as these are the ones you’re referencing. there are a couple of other plans that have been filed that are both contemplating just removing our seniority status, removing our senior claim and taking huge haircuts from our class and not from other classes. i mentioned in a meeting with a debtor it felt like four wolves and a lamb voting over who to eat for dinner. the fees that david referenced in excess of $1 billion in terms of restructuring and resolution of the bankruptcy, is it your contention that some of the larger hedge funds are okaying the the advisers getting these large fees as a result of the preferential treatment? no. i bring up the fees to talk about the enormt of the scenario. every single person part of the advisory team or legal team, they’re all paid by the hour. everyone that owns these claims has a vested interest in this moving along quickly. you own the claims, too. you obviously own the ones now. we own the european claims. many individuals own them, but you’re a big guy with a big voice. you have plenty of capital behind you to go to court and try to fight for your claim and their claim. are you going to do that? i think if there can be a negotiation when we come back to the table and there’s a cut in everyone claim, i’m okay with that. i’m not okay with taking multiples of cuts of others and not have them on the table. when you meet with someone and say you’re not barking loud enough and take what they give you and move on, under the auspices of them telling you they’re trying to file a plan that’s the least number of objections and trying to move it through quickly. the least performance is not synonymous with fair and equitable. that’s the problem. i don’t think they’re representing all creditors fairly and equitably. if the outcome is not successful for the direction you’re moving in, is this going to set a precedent for future bankruptcies in terms of what happens in the capital structure. what worries me about the whole process is the rule of law. either the rule of law needs to be followed in these claims in the way — these bonds were sold as recently as mid-2008. so the real issue is the little guy, the small investor in this case is literally getting freight trained in the process, and they have no voice. the banks that sold them these bonds don’t — are not looking out in their best interesting because they don’t want to have that difficult conversation with the people they cost a lot of money to. kyle, we have to leave it there. it it seems you started a bark, so well-done. we’ll follow this. i’m glad we had a chance to talk about the lehman bankruptcy. isn’t it amazing lehman continues to creep up and controversy always surrounding the name. kyle bass, we’re thankful to him hundred.