Edgar Filing: Flagstone Reinsurance Holdings Ltd

Ownership Submission

FORM 4

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person ^*

LEHMAN BROTHERS HOLDINGS INC

2. Issuer Name and Ticker or Trading Symbol
Flagstone Reinsurance Holdings Ltd [FSR]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

_____ Director	__X__ 10% Owner
_____ Officer (give title below)	_____ Other (specify below)

(Last)

(First)

(Middle)

745 SEVENTH AVENUE,

3. Date of Earliest Transaction (Month/Day/Year)
05/10/2007

(Street)

NEW YORK, NY 10019

4. If Amendment, Date Original Filed(Month/Day/Year)

6. Individual or Joint/Group Filing(Check Applicable Line)
___ Form filed by One Reporting Person
_X_ Form filed by More than One Reporting Person

(City)

(State)

(Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security
(Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code
(Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date
(Month/Day/Year)

7. Title and Amount of Underlying Securities
(Instr. 3 and 4)

8. Price of Derivative Security
(Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)

11. Nature of Indirect Beneficial Ownership
(Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Restricted Share Units

⁽¹⁾

05/10/2007

6,240

⁽¹⁾

Common Shares

6,240

$ 0 ⁽²⁾

12,073

See footnote 3 ⁽³⁾

Reporting Owners

Reporting Owner Name / Address	Relationships
Reporting Owner Name / Address	Director	10% Owner	Officer	Other
LEHMAN BROTHERS HOLDINGS INC 745 SEVENTH AVENUE NEW YORK, NY 10019		X
JAMES E DANIEL FLAGSTONE REINSURANCE HOLDINGS LTD. CRAWFORD HOUSE, 23 CHURCH STREET HAMILTON, D0 HM 11	X

Signatures

/s/Barrett S. DiPaolo		05/14/2007
^**Signature of Reporting Person		Date
/s/E. Daniel James		05/14/2007
^**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	The Restricted Share Units ("RSUs") vest 100% on the date of the grant.
(2)	Each RSU represents the right to receive without payment to the Company, one newly-issued, fully paid and non-assessable common share of the Company, subject to the terms and conditions of the RSU Plan and the grant certificate evidencing each grant. In the discretion of the Compensation Committee, upon vesting the value of the RSU grant alternatively may be paid in cash, or partly in cash and partly in common shares.
(3)	Mr. James is a director of the Issuer and a Managing Director of Lehman Brothers Inc. ("LBI"), a wholly-owned subsidiary of Lehman Brothers Holdings Inc. ("LBHI"). Under the terms of Mr. James' employment with LBI, LBI is the beneficial owner of the 12,073 RSUs granted to Mr. James as a director of the Issuer. LBHI may be deemed to be the beneficial owner of these RSUs. Mr. James disclaims beneficial ownership of the RSUs reported herein.
Remarks: JOINT FILER INFORMATION Title of Derivative Securities: Restricted Share Units Issuer & Ticker Symbol: Flagstone Reinsurance Holdings Limited [FSR] Designated Filer: Lehman Brothers Holdings Inc. 745 Seventh Avenue New York, New York 10019 Other Joint Filer: E. Daniel James C/O Flagstone Reinsurance Holdings Limited CRAWFORD HOUSE 23 CHURCH ST HAMILTON BERMUDA HM 11 Date of Event Requiring Statement: May 10, 2007

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