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Lehman 7/13
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Lehman creditors' recovery may soon reach $7.8 billion
Jul 13, 2015 | Reuters
By Jonathan Stempel
The trustee liquidating Lehman Brothers Holdings Inc's brokerage unit on Monday asked a federal bankruptcy judge for permission to distribute another $1.89 billion to unsecured creditors, boosting their total recovery to $7.78 billion. -
Lehman Bros bankruptcy trustee seeks $1.89 billion distribution to unsecured creditors
Jul 13, 2015 | Associated Press
A trustee for the bankrupt investment bank Lehman Brothers Inc. is seeking court approval to make another distribution, totaling $1.89 billion, to unsecured creditors in the case. -
Lehman Bros. Trustee Seeks $1.9B Creditor Payout
Jul 13, 2015 | Law360
By Jonathan Randles
The liquidating trustee for Lehman Brothers Inc. on Monday requested permission from a New York bankruptcy court to distribute approximately $1.89 billion to unsecured general creditors who have asserted valid claims against Lehman's failed brokerage firm. -
Lehman Aims to Return $1.89B More to Brokerage Creditors
Jul 13, 2015 | Daily Bankruptcy Review
By Joseph Checkler
The trustee unwinding Lehman Brothers Inc. is seeking court permission to pay nearly $2 billion more to the defunct brokerage's unsecured creditors, which would be the third such distribution since he paid off the brokerage's customers.
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Lehman creditors' recovery may soon reach $7.8 billion
Jul 13, 2015 | Reuters
By Jonathan Stempel
The trustee liquidating Lehman Brothers Holdings Inc's brokerage unit on Monday asked a federal bankruptcy judge for permission to distribute another $1.89 billion to unsecured creditors, boosting their total recovery to $7.78 billion.
James Giddens, the trustee, said the creditors will have recouped 35 cents on the dollar, up from 27 cents so far, if the proposed third payout wins approval from U.S. BankruptcyJudge Shelley Chapman at an August 4 hearing in Manhattan.
"This result, in the largest broker-dealer insolvency in history, could not have been anticipated in the dark days of the financial crisis when this liquidation began," Giddens said in a court filing.
Lehman had been Wall Street's fourth-largest investment bank before seeking Chapter 11 protection on Sept. 15, 2008.
Roughly 111,000 former customers of the brokerage have already been paid more than $106 billion, and senior creditors have also been paid in full.
Giddens said the latest payout includes $1.18 billion that he had held in reserve.
He said this included $583 million for disputes over Barclays Plc's (BARC.L) hurried purchase of much of the brokerage unit a few days after the bankruptcy filing. Those disputes were settled on June 5.
The case is In re: Lehman Brothers Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-01420.
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Lehman Bros bankruptcy trustee seeks $1.89 billion distribution to unsecured creditors
Jul 13, 2015 | Associated Press
A trustee for the bankrupt investment bank Lehman Brothers Inc. is seeking court approval to make another distribution, totaling $1.89 billion, to unsecured creditors in the case.
Lehman's bankruptcy in September of 2008 signaled the start of the global financial crisis and was a major catalyst of the financial meltdown. It was the largest bankruptcy in U.S. history, with Lehman listing $639 billion in assets at the time.
Unsecured creditors are normally among the last to get paid in a bankruptcy case, and they often receive only a percentage of the total amount owed if anything. A spokesman for Trustee James W. Giddens said unsecured general creditors in this case might include former employees, pension funds or banks, among other parties.
Total payments to unsecured general creditors will add up to about $7.8 billion if the bankruptcy court approves this third distribution. Two previous payments have already been made, and the third will bring the total paid to about 35 percent of what is owed.
Secured and priority creditors were first in line for distributions. Counting those claims, total distribution to creditors in the case would surpass $8 billion with the latest allocation to unsecured creditors.
"The wind down of the estate continues in earnest, and we will continue to resolve outstanding issues so that all remaining available assets can be fully distributed," Giddens said in a statement.
Aside from creditors, customers have received more than $106 billion, an amount that fully satisfies 111,000 claims.
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Lehman Bros. Trustee Seeks $1.9B Creditor Payout
Jul 13, 2015 | Law360
By Jonathan Randles
The liquidating trustee for Lehman Brothers Inc. on Monday requested permission from a New York bankruptcy court to distribute approximately $1.89 billion to unsecured general creditors who have asserted valid claims against Lehman's failed brokerage firm.
If approved, the distribution would push the total payout to LBI's unsecured general creditors to approximately $7.8 billion, which would represent a 35 percent distribution on their claims, liquidating trustee James Giddens said. LBI, along with other Lehman units, filed for bankruptcy in September 2008 and represents the largest broker-dealer bankruptcy in history.
“With this third distribution to unsecured general creditors of nearly $2 billion, we have come a long way from the beginning of the liquidation when the mere existence of a general estate was in doubt,” Giddens said in a statement. “The wind-down of the estate continues in earnest, and we will continue to resolve outstanding issues so that all remaining available assets can be fully distributed.”
Monday's filing comes weeks after U.S. Bankruptcy Judge Shelley Chapman signed off on a $1.3 billion settlement between LBI and Barclays Capital Inc. that resolved a dispute over the sale of the collapsed investment bank's brokerage business, saying it will benefit Lehman creditors.
Judge Chapman said at the time that LBI's settlement with Barclays will allow the estate to claim hundreds of millions of dollars the estate might have needed to forfeit had a deal not been reached. That recovery is far greater than any amount LBI employees could have received had the estate pursued litigation against Barclays on the workers' behalf, she said.
Last week, Giddens moved to wipe out a claim worth at least $61.5 million brought byFirstBank Puerto Rico, arguing that a recent Second Circuit decision over a federal law protecting securities investors prevents the bank from recovering anything from the estate.
In a letter to Judge Chapman, attorneys for the trustee said FirstBank's claim is barred because the bank cannot be considered a “customer” of the firm under the Securities Investor Protection Act. FirstBank's claim is tied to government securities it “entrusted” to LBI before Lehman imploded in 2008. The securities were intended to be used as collateral for a series of interest rate swaps.
Giddens is represented by William Maguire, Seth Rothman, Neil Oxford, Samuel McCoubrey and William Stein of Hughes Hubbard & Reed LLP.
The bankruptcy is In re: Lehman Brothers Holdings Inc., case number 1:08-bk-13555, in the U.S. Bankruptcy Court for the Southern District of New York. -
Lehman Aims to Return $1.89B More to Brokerage Creditors
Jul 13, 2015 | Daily Bankruptcy Review
By Joseph Checkler
The trustee unwinding Lehman Brothers Inc. is seeking court permission to pay nearly $2 billion more to the defunct brokerage's unsecured creditors, which would be the third such distribution since he paid off the brokerage's customers.
In a Monday filing with U.S. Bankruptcy Court in Manhattan, trustee James W. Giddens said he wants to pay $1.99 billion to the creditors. If approved, that would bring the total amount returned to more than $8 billion, a recovery of about 35 cents on the dollar. Combined with distributions made to customers, the total amount recovered in the brokerage's liquidation would be around $114 billion.
"We have come a long way from the beginning of the liquidation when the mere existence of a general estate was in doubt," Mr. Giddens said. "The wind-down of the estate continues in earnest, and we will continue to resolve outstanding issues so that all remaining available assets can be fully distributed."
Mr. Giddens will ask a bankruptcy judge to authorize the distribution at an Aug. 4 hearing.
In the filing, Mr. Giddens's lawyers said that after the third distribution, further payouts would be contingent on winning or settling pending litigation, which would free up funds currently on reserve.
The trustee began paying back creditors---former employees, pension funds, banks and investment firms with unsecured claims against the brokerage---last summer after making the brokerage's customers whole.
The distinction between "customer" and "creditor" is a crucial one in the Lehman case. Customer claims get paid before creditor claims under the law covering failed broker-dealers, the Securities Investor Protection Act of 1970.
Customers get 100% of their money back, while unsecured creditors get much less.
As Mr. Giddens has resolved and settled more claims, he has asked a judge to approve distributions to the creditors.
Individual customers of the U.S. brokerage, which is under the purview of the bankruptcy court but not technically in bankruptcy protection, received about $92.3 billion almost immediately after Lehman collapsed. In all, Mr. Giddens has already paid more than $106 billion to customers and has said he has already exceeded his goal of distributing $110 billion to creditors and customers.
Lehman, once the nation's fourth-largest investment bank by assets under management, collapsed into the largest bankruptcy ever in September 2008 with $613 billion in liabilities.
The filing sent markets into turmoil and helped trigger a global financial crisis. Lehman's brokerage business was quickly sold to Barclays PLC (BCS), and the company's New York-based holding company officially exited bankruptcy in 2012.
The Lehman estate, which itself has paid back tens of billions of dollars to creditors, is still winding down and selling off its remaining holdings, a process that is expected to continue for several more years. The brokerage is being unwound separately. Judge Shelley C. Chapman is overseeing both proceedings.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com )
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