Vanessa,

Thank You for replying but that was not what I was asking for.
You did not address the issue at all: stating that once check-in is closed and passenger cannot drop off the luggage - that is obvious. And to advice to pay a fee to reinstate the miles is also obvious, but this reply is certainly doesn't address the subject.

Agents could have assisted and rebooked to later flights but instead they chose to cancel the entire ticket!

Anyway, seeing that asking for guidance with mile reinstatement w/o any fees from Lufthansa representative in this thread did not lead anywhere - I continued and called Miles and More. Wrote a letter. Received another absurd reply - this time Lufthansa claimed that passenger flew on the outbound!!! Such reply only shows that letters are not read and comprehended by Lufthansa's representatives.

Then, I called to Miles and More again to hear a new absurd story, that passenger did not pay 45K in miles but only 15K!!! Another absurd statement. they can't even read the numbers and distinquish 45 from 15.

Finally, spoke to an adequate supervisor in the US who did not make any absurd/false comments and understood the issue. He made a decision to stop this runaround and resolved the issue.

An update: request was resolved and 45K miles credited back to account w/o any fees.

So,everyone, don't get discouraged by false statements from Lufthansa employees and try to find someone adequate and with common sense.