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Reply #16: Lehman Enters Final Bankruptcy Phase as Judge Approves Plan [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-07-11 07:51 AM
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16. Lehman Enters Final Bankruptcy Phase as Judge Approves Plan

Lehman Brothers Holdings Inc. (LEHMQ) was given permission by a federal judge to begin the final phase of the biggest bankruptcy in U.S. history, as the defunct securities firm said it would begin to distribute some of its $23 billion in available cash.

The bankruptcy may have reached its halfway point, as Lehmans plan calls for liquidation of its remaining assets over the next three years to raise a total of $65 billion. Lehman, once the fourth-largest investment bank, collapsed in September 2008 with assets of $639 billion.

U.S. Bankruptcy Judge James Peck approved the plan after the objection of one final creditor was overcome. The plan is backed by creditors holding about $450 billion in claims, which is a huge achievement, Peck said today. The case was the most impossibly challenging bankruptcy ever, he said.

Lehman, which was run by Chief Executive Officer Richard Fuld when its collapse helped bring on the worst economic slump since the Great Depression, settled a fight with creditors in a June payment plan that allotted more money to derivatives claimants including Goldman Sachs (GS) and less to bondholders such as Paulson & Co. Both groups had proposed rival plans to pay Lehmans debts...
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