Lehman to Pay Creditors an Additional $10.5 billion

by San Antonio Attorney

Creditors of Lehman Brothers Holdings Inc will be paid roughly $10.5 billion beginning November. This is the second part of its plan to gradually pay out over $65 billion.

Lehman is going to distribute the payments to subsidiaries and affiliates, and also to the third-party creditors, according to court papers filed with the Manhattan bankruptcy court.

The failed investment bank has already paid approximately $22.5 billion in the first part of its payout plan, announced in April. The $10.5 billion second batch of payment will give a total of $33 billion repayment.

Although that is around 50 percent of the total amount they are expected to get, it is a long way away from completing the repayment which is over $300 billion in creditors’ claims against the bankrupt giant.

The company’s collapse in 2008 aided the spike of the global financial crisis. The company has undergone a disorderly liquidation. After 3-1/2 years of waiting, its creditors are finally starting to recover some of their money. Lehman had fought with creditors and bondholders such as Goldman Sachs for the terms of a repayment plan.

Lehman proposed a payback plan in June 2011 that it pushed as a “global compromise.” The total repayment was approximately $65 billion, offering recoveries from 20 up to 30 cents on the dollar to a number of its creditors. The creditors of its mother company are predicted to recoup roughly 21 cents on the dollar. Goldman Sachs and other derivatives creditors are going to get roughly 28 cents.

The real cost would rely upon Lehman’s triumph in selling and making money from its real estate property and other types of assets.

Lehman’s spokesman could not be reached right away for comment.

On Tuesday, Lehman gave a statement that it hopes to make a third distribution by end of March 2013.

 

-  A company that files for bankruptcy is required to state all of its debts, properties and assets that it is seeking protection from. Creditors have the right to question the debtor. A business bankruptcy can be very complex that is why it is necessary to hire a qualified lawyer, such as a San Antonio Lawyer, to manage the bankruptcy case.

Leave a Comment

Previous post:

Next post: