Lehman Creditors Blasted On Bondholders’ Disclosure Proposal

by San Antonio Attorney

The creditors of Lehman Brothers condemn the efforts of the failed bank bondholders in pressuring them to disclose the specifics of their claims against Lehman Brothers Holdings Inc.

Objections on the bondholders’ plan were file by about 15 parties in U.S. Bankruptcy Court in Manhattan on Wednesday and Thursday. The creditors are saying that the proposal would go beyond the requirements of the bankruptcy rule.

The random group of bondholders seeks to require all parties involved or trying to influence the Lehman bankruptcy outcome to be transparent of the details of their claims, which includes the profits of acquiring such claims.

In the objection filed by Barclays Capital Inc, it said that the proposal is unprecedented and would burden almost all of the parties involved.

Bank of America is blasting the proposal saying that it is only a strategy to discourage creditors from trying to make a say on the repayment plan.

Lehman is going to distribute $60 billion to its various creditors. Lehman and its creditors have rivaling proposals with regards to the sharing of the amount.

The disclosure proposal came about when the judge required the bondholders, led by Paulson & Co hedge fund, to provide details of their claims against Lehman which is approximately $20 billion. The bondholders said it is only fair that all parties conform to the disclosure requirements so that it would not appear to be a biased enforcement against those who resist the repayment plan of Lehman.

The Wall Street Journal’s analysis revealed that Paulson could profit about $350 million up to $726 million from the Lehman debt which it was able to obtain at a huge discount.

A spokesman for the bondholders declined to comment Thursday.

Judge Peck will consider the matter in a hearing scheduled on June 15.

Legal obligations to pay your debts can be discharged in bankruptcy. Find out how by going to a San Antonio bankruptcy attorney.

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