Oct 26 (Reuters) - Lehman Brothers Holdings Inc said its
reorganization plan now has the backing of creditors who hold
more than $160 billion of claims, and believes it has won
enough support to end its record bankruptcy.
According to a court filing, Lehman has locked up nine new,
major settlement agreements, paving the way for what it hopes
will be a smooth home stretch for the Chapter 11 bankruptcy of
what was once Wall Street's No. 4 investment bank.
"We believe, right now, that we have enough support to
confirm a plan," said Lori Fife, a partner at Weil Gotshal &
Manges and Lehman's lead bankruptcy lawyer, in an interview.
"We hope it will get confirmed by the end of the year, and we
hope to make distributions early next year."
The latest settlements include six with affiliates such as
Lehman Brothers International (Europe) and 56 British
affiliates, and three with outside creditors such as Germany's
central bank, Deutsche Bundesbank.
Creditors have until Nov. 4 to vote on the plan. U.S.
Bankruptcy Judge James Peck in Manhattan is expected to
consider approval at a hearing that begins on Dec. 6.
The plan would return about $65 billion to creditors
holding an estimated $320 billion of allowed claims. Lehman's
liquidation is expected to continue for a few years after
In September, Lehman reached a settlement in principle with
Lehman Brothers International (Europe). Harvey Miller, another
bankruptcy lawyer for Lehman, called that dispute the largest
remaining obstacle to Lehman's emergence from bankruptcy.
The European arm will retain a $1.01 billion unsecured
claim against Lehman, and a $900 million unsecured claim
against the Lehman Brothers Special Financing derivatives unit,
among other claims.
Meanwhile, the Bundesbank will get an unsecured $3.5
billion claim, while the German banking association
Bundesverband Deutscher Banken (BdB) will get a $5.3 billion
unsecured claim, according to other settlement agreements.
"The rapidly growing level of support for our plan
demonstrates that our creditors understand the logic of the
economic compromise we have proposed," Lehman Chief Executive
Bryan Marsal said in a statement on Wednesday.
Lehman had $639 billion of assets when it filed for
protection from creditors on Sept. 15, 2008, a filing that was
a major trigger of that year's global financial crisis.
The latest Chapter 11 plan was proposed in June, and Lehman
has touted it as a compromise for diverse creditor groups.
Two groups -- bondholders led by hedge fund Paulson & Co
and the California Public Employees' Retirement System pension
fund, and derivatives creditors such as Goldman Sachs Group Inc
and Morgan Stanley -- had proposed their own bankruptcy plans
before accepting Lehman's compromise.
Asian affiliates holding about $20 billion of claims have
also pledged support, as has Bank of America Corp, which agreed
to reduce its derivatives and guarantee claims against Lehman
by $7.5 billion.
The case is In re Lehman Brothers Holdings Inc, U.S.
Bankruptcy Court, Southern District of New York, No.
(Reporting by Nick Brown and Jonathan Stempel; Additional
reporting by Maneesha Tiwari)
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