Bondholders of Lehman Brothers Holdings Inc
The bondholders, an ad-hoc group led by hedge fund Paulson & Co, filed court papers on Monday saying the hearing initially slated for Wednesday would be pushed to July 20.
They said the delay would permit the group to continue discussions to attempt to resolve or narrow certain objections from units of several large banks, including Goldman Sachs Group Inc
A spokesman for the bondholders did not comment on Monday. An attorney for Goldman said the company had not yet begun discussions with the bondholders to try to resolve the dispute.
Lawyers for Morgan Stanley and Deutsche Bank could not immediately be reached for comment.
The banks are part of a group proposing a plan to divvy up about $60 billion in the Lehman estate to pay back creditors of the company, which filed the biggest bankruptcy in U.S. history in September 2008. The bondholders have filed a competing plan that would yield lower returns for the banks.
In court papers filed on Friday in U.S. Bankruptcy Court in Manhattan, the banks said the bondholders' proposal would require the disclosure of sensitive information and would go far beyond bankruptcy rules.
The bondholders in April were ordered by Judge James Peck, who oversees the bankruptcy, to disclose key points about their roughly $20 billion in claims, including the price paid for those claims. An analysis by the Wall Street Journal found that Paulson's fund, which bought its Lehman debt at a steep discount, could make profits of $350 million to $726 million from the bankruptcy.
The bondholders said all parties should be required to meet the same disclosure requirements, a position supported by Lehman. The group in May proposed a uniform standard for anyone trying to influence Lehman's payback plan.
But opponents say the bondholders' proposal is a litigation tactic designed to discourage creditors from seeking to influence Lehman's repayment.
Other parties opposed to the proposal are Bank of America Corp
One matter still on the agenda for Wednesday's hearing is Lehman's ongoing fight with the so-called SunCal parties, a group of 20 real estate projects under bankruptcy protection in California. Lehman, which helped finance the projects to the tune of $2 billion, is one of SunCal's biggest creditors.
Claiming Lehman misled them in hopes of taking control of the properties, the SunCal parties proposed a reorganization plan that would bury Lehman's claims below other creditors'.
The sides are fighting over whether such a plan is allowed under the automatic stay provision of the bankruptcy code, which protects bankrupt firms, like Lehman, from creditors looking to collect on debts.
Lehman will also seek permission at Wednesday's hearing to sell two reverse mortgage portfolios to MetLife
Judge Peck is also slated to hear arguments over the proposed $161 million sale of a former office building on which Lehman was forced to foreclose. The ad-hoc bondholder group has objected to the sale, saying the price represents a steep discount on the New York property's value.
The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.