Lehman Brokerage Settled Dispute over $38 Billion in Claims

by San Antonio Attorney

Lehman Brothers Holdings Inc and Lehman Brothers International Europe have settled a $38 billion dispute in asset claims, a significant progress for creditors and customers to recover their money.

On Friday, Lehman Brothers International Europe and Lehman Brothers Inc made a joint statement unveiling the settlement deal.

The agreement still needs to be approved by the U.S. bankruptcy court, which is expected to be on the first quarter of next year. The approval of the English High Court is also required.

The U.S. brokerage unit of the company announced another agreement with Lehman Brothers Finance AG, a former derivatives unit based in Switzerland.

Put together, the settlement deals sort out the two largest claims against the U.S. brokerage unit.

James Giddens, the trustee appointed to liquidate Lehman, said the deals made were an important step that will enable customers to recuperate all of their property a lot earlier than if LBIE legally pursued its claims on over 200,000 trades.

According LBIE joint administrator Tony Lomas, under the agreement he can concentrate on how to distribute assets worth $7 billion.

In the accord, the LBIE will receive $8 billion, which consist of $7.5 billion in cash and securities plus $500 million cash in net equity.

LBIE will also receive $4 billion in claims for general property, as well as post-filing income of $600 million.

The $13.8 billion unsecured claim of Lehman Brothers Inc. against the LBIE will be wiped out. They are going to postpone litigation until the end of this year while they come up with a final agreement.

Lehman was the fourth biggest investment bank in the United States before it filed for bankruptcy protection in September 2008. The company’s filing contributed to the global financial crisis. The bankruptcy of Lehman is considered as the biggest bankruptcy in the history of United States.

Lehman has settled or intends to settle $33 billion of the $65 billion claims filed against the company, allowing creditors to recover around 21 cents on the dollar.

 

-   The exact procedures for objecting to dischargeability of debt are not the same for all types of bankruptcy. Each bankruptcy Chapter has its own procedures for filing deadlines. If you are filing for Chapter 7 bankruptcy, an experienced San Antonio Chapter 7 Attorney can be necessary to obtaining a favorable result.

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