Reuters: Bankruptcy News: Lehman to pay creditors another $10.5 billion

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Lehman to pay creditors another $10.5 billion Sep 25th 2012, 16:50 Tue Sep 25, 2012 12:50pm EDT * Says plans to start payouts early next month * Part of plan to return about $65 bln to creditors * Creditors have already received about $22.5 bln By Nick Brown NEW YORK, Sept 25 (Reuters) - Lehman Brothers Holdings Inc on Tuesday said it will pay about $10.5 billion to creditors starting early next month, the second leg of a plan to eventually pay out more than $65 billion. Lehman will distribute the money to affiliates and subsidiaries, as well as to third-party creditors, according to a filing in Manhattan bankruptcy court. Creditors have already received about $22.5 billion under the first leg of the payout plan, unveiled in April. The additional $10.5 billion will bring total payback to around $33 billion. While that is about half the total they are estimated to receive, it's a far cry from full payback on the more than $300 billion in claims leveled by creditors against the defunct financial giant. Lehman's collapse on Sept. 15, 2008 helped spur the global financial crisis. Creditors waited 3-1/2 years for payback as Lehman trudged through a messy liquidation, fighting with bondholders and creditors like Goldman Sachs Group Inc for control of the terms of a payback plan. In June 2011, Lehman proposed a plan it touted as a "global compromise," estimating about $65 billion in total payback and giving many creditors recoveries of between 20 and 30 cents on the dollar. Creditors of Lehman's parent are projected to recover about 21 cents on the dollar, while derivatives creditors, like Goldman, will get about 28 cents. Actual totals depend on Lehman's success in marketing and monetizing its real estate and other assets, which could be affected by changes in markets. A spokeswoman for Lehman could not immediately be reached. Lehman said in a statement on Tuesday it anticipates making a third distribution around March 30. The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555. Link this Share this Digg this Email Reprints

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