Lehman Brothers’ Swiss Unit Agrees to Cut Claims by Billions

by San Antonio Attorney

Lehman Brothers Holding Inc has reduced claims worth billions of dollars filed by a derivatives unit in Switzerland. The details of the arrangement were revealed in the court filing.

Lehman left bankruptcy last year but it has to take care of various unfinished lawsuits. The deal with the Swiss unit Lehman Brothers Finance AG (LBF) was the final major lawsuit to be resolved.

International chief Daniel Ehrman said in a statement that the settlement prevents many years of possibly expensive litigation and enables LBF to make faster distribution of payments to creditors while helping LBHI with a considerable recovery.

The deal was revealed a week ago, but it was only until Tuesday that the details were unveiled in a court filing.

Court papers showed that LBF agreed to reduce its claim against LBH from $15.4 billion to $942 million. The Swiss unit also designated to LBH its claims that are worth billions of dollars that it asserted against some of the affiliates of Lehman.

In exchange, Lehman Brothers Holding reduces its claim to LBF from $14.2 billion to $8.75 billion. The company will also partially subjugate its LBF claims to the claims of the Swiss unit’s affiliate and third party creditors.

The agreement needs to be approved by the U.S. Bankruptcy Court in Manhattan. A request for a hearing on April 24 has been filed.

Lehman was the fourth-largest investment bank before it filed for bankruptcy in 2008. The bankruptcy was considered as a major set off for the global financial crisis that year.

The failed investment bank stated $639 billion of assets back then, which makes it the biggest bankruptcy in the history of the United States.

The company’s third distribution of payments to creditors is scheduled on Thursday. The amount to be distributed is $14.2 billion.

 

- Filing for bankruptcy prevents creditors from contacting you in order to collect your money. Creditors have to file proofs of claims in court in order to attempt to collect a debt owed to you. If you are considering filing for bankruptcy to find relief from your creditors collection activities, you should consult a San Antonio Lawyer who is experienced in handling bankruptcy cases.

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