Lehman Brothers Holdings Inc
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, Lori Fife, a partner at Weil Gotshal & Manges and Lehman's lead bankruptcy lawyer, said 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 November 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 December 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 payouts begin.
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 September 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
Asian affiliates holding about $20 billion of claims have also pledged support, as has Bank of America Corp
The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Nick Brown and Jonathan Stempel in New York; Additional reporting by Maneesha Tiwari in Bangalore; Editing by Matt Driskill and Derek Caney)