Few Lehman creditors want court to consider their restructuring

By @ibtimes on

Few creditors of Lehman Brothers Holdings want the court to consider their alternate restructuring plan when the bankrupt investment bank's own proposal comes up for voting in June, court documents show.

The group of creditors known as Ad hoc wants the court to approve voting on their plan on June 28, along with Lehman's new proposal to repay its creditors, which was spelled out by the bank in a disclosure statement back in January.

The group, which includes the pension fund California Public Employees Retirement System (Calpers) and hedge fund Paulson & Co, had objected to Lehman's previous plan saying that it favored large banks who were creditors of the derivatives business over other creditors.

Fairness dictates that the competing disclosure statements and plans are presented to the court and parties in interest concurrently, the creditor group argued in the court papers.

The group said Lehman Brothers unfortunately and somewhat inexplicably have objected to the consideration of both the plans during the June 28 hearing.

The Ad hoc group had earlier argued that Lehman should combine all of its assets from across its corporate family and then pay out claims, saying it would distribute assets more equally and boost payouts to bondholders.

The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.

(Reporting by Sakthi Prasad in Bangalore; Editing by Dhara Ranasinghe)

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