Bloomberg reports that the brokerage’s parent, Lehman Brothers Holdings Inc., made its first payment of $22.5bn to creditors last April, about 3 1/2 years after filing the biggest U.S. bankruptcy in history four years ago.
Elliott Management Corp., a New York hedge fund, demanded in June that brokerage trustee James Giddens sell securities and pay an initial $3.2bn soon. Giddens responded this week, saying Elliott is a 'claims trader' and doesn’t share other customers’ interests. On September 13th, two creditor groups sided with Elliott, with an unofficial group in favor of giving Giddens just 60 days to resolve claims with a European affiliate. The official group didn’t set a deadline.
Elliott’s plan would benefit all creditors of the brokerage, 'and is, thus, in the best interests of these debtors’ estates and creditors', the official creditors committee of the Lehman parent, once the fourth-largest investment bank, said in a bankruptcy court filing in Manhattan.
By March 30, Giddens had $25.4bn of securities in hand, Elliott said. By selling securities, he could pay almost 26 cents on the dollar of allowed claims totaling $12.2bn, while still reserving enough money for disputed claims, the hedge fund said.
Hit the link below to access the complete Bloomberg article:
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