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lehman feb 20
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Judge Approves $2.2 Billion Lehman Distribution
Feb 19, 2015 | The Wall Street Journal
By Joseph Checkler
A judge on Thursday said another $2.2 billion can be paid to former employees and other creditors of Lehman Brothers Holdings Inc.’s collapsed brokerage arm. Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan approved the request by James W. Giddens, the official unwinding the brokerage. -
Lehman Brothers Creditors Getting $2.2B Payout
Feb 20, 2015 | Law360
By Stewart Bishop
A New York bankruptcy judge on Thursday approved a $2.2 billion payout from the liquidator of the broker-dealer unit of defunct Lehman Brothers Holdings Inc. to former employees, pension funds, banks and other creditors. U.S. Bankruptcy Judge Shelley C. Chapman signed off on the distribution, which will bring the total amount received...
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Judge Approves $2.2 Billion Lehman Distribution
Feb 19, 2015 | The Wall Street Journal
By Joseph Checkler
A judge on Thursday said another $2.2 billion can be paid to former employees and other creditors of Lehman Brothers Holdings Inc.’s collapsed brokerage arm.
Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan approved the request by James W. Giddens, the official unwinding the brokerage. After this distribution is complete creditors of the brokerage, called Lehman Brothers Inc., will have received approximately $6 billion since last July. They have recovered about 27 cents on the dollar from what these creditors said they were owed.
“This is a noteworthy achievement,” Judge Chapman said in approving the distribution, pointing out the perceived unlikelihood that creditors of the brokerage would receive that much—if anything—when Lehman first collapsed.
“We will work toward additional distributions while maintaining appropriate reserves and protecting claimants’ interests and due process rights,” Mr. Giddens said in a news release.
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 creditors under the law covering failed broker-dealers, the 1970 Securities Investor Protection Act.
Mr. Giddens is now concentrating on resolving remaining claims and making further general creditor distributions to close the estate as promptly as possible.
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 paid more than $106 billion to customers and hopes to have returned more than $110 billion when he is finished. Customers get 100% of their money back, while unsecured creditors get much less...
For full story:
http://www.wsj.com/articles/judge-approves-2-2-billion-lehman-distribution-1424361091
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Lehman Brothers Creditors Getting $2.2B Payout
Feb 20, 2015 | Law360
By Stewart Bishop
A New York bankruptcy judge on Thursday approved a $2.2 billion payout from the liquidator of the broker-dealer unit of defunct Lehman Brothers Holdings Inc. to former employees, pension funds, banks and other creditors.
U.S. Bankruptcy Judge Shelley C. Chapman signed off on the distribution, which will bring the total amount received by creditors of Lehman Brothers Inc. to almost $6 billion since July 2014, according to the liquidating trustee, James W. Giddens of Hughes Hubbard & Reed LLP.
“We are moving ahead with our second multibillion distribution to unsecured general creditors as we continue to wind down the LBI estate,” Giddens said in a statement. “We will work towards additional distributions while maintaining appropriate reserves and protecting claimants’ interests and due process rights.”
Coming on top of the $3.7 billion Giddens has paid out thus far, the latest $2.2 billion infusion will allow unsecured general creditors to receive about 27 percent of their allowed claims.
The distributions are set to begin in the second week of March.
The possibility of a general estate had been in doubt when LBI fell into Securities Investor Protection Act liquidation proceedings after Lehman's 2008 bankruptcy.
LBI customers have long since been repaid, with $106 billion paid out to cover 111,000 claims, according to the trustee. Holders of secured claims have won full repayment as well, as have those with priority and administrative claims.
On July 30, with former customers of Lehman being paid off in full, Giddens won permission in New York bankruptcy court to create a fund of billions of dollars and dish out money from the estate of the failed brokerage house to general unsecured creditors for the first time. Ruling from the bench, Judge Chapman approved Giddens’ request to create the fund and make an interim distribution to holders of general allowed unsecured claims.
Although Lehman’s bankruptcy plan was confirmed in 2011, its estate is still mired in litigation over various unsettled claims that will likely go on for years. The September 2008 bankruptcy filing is widely blamed for kicking off the economic recession.
On Tuesday, Giddens reached a deal with Bermuda-based reinsurance affiliate Lehman Re Ltd., cutting the unit's $195 million claim against its parent down to $125 million.
Liquidators for Lehman Re had claimed that it was owed, under a 1999 master repurchase agreement, millions of dollars following LBI's failure to buy back more than two dozen securities after the firm defaulted. Giddens contested the valuation of the $195 million in general creditor claims, but agreed to $125 million in nonpriority unsecured creditor claims...For full story:
http://www.law360.com/articles/623015/lehman-brothers-creditors-getting-2-2b-payout
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