Lehman Brothers Holdings Inc said it will take longer than expected to win approval of its bankruptcy reorganization plan as it tries to settle differences with creditors, who are owed well over $300 billion.

Harvey Miller, a lawyer for the company, told a U.S. bankruptcy judge in Manhattan that Lehman hopes to file a revised Chapter 11 plan within seven to 10 days, and win court approval of the plan well before the end of the year.

Lehman earlier hoped to have a plan approved by the end of March. Miller, a partner at Weil Gotshal & Manges LLP, said at Thursday's hearing before U.S. Bankruptcy Judge James Peck that this timeline is no longer feasible.

In a regulatory filing, Lehman said it expects to have about $60.1 billion of assets, up from the $57.5 billion it estimated six months earlier, to distribute to creditors who claim to be owed $369 billion.

It said the bankruptcy court will likely allow creditors to pursue $322 billion of these claims. It said a significant amount remains unresolved, including $40.3 billion related to derivatives.

The company also needs to reach an accord with a group of creditors, including billionaire investor John Paulson, that submitted a competing Chapter 11 plan in December.

This group believes Lehman's plan treats big bank creditors better than other creditors.

Once the fourth-largest U.S. investment bank, Lehman filed for court protection on September 15, 2008, in by far the largest bankruptcy in U.S. history, after growing overexposed to real estate, mortgages and complex debt that plunged in value.

The bankruptcy filing is considered one of the main triggers of the global financial crisis.

GOLDEN OPPORTUNITY TO SELL ASSETS

Lehman can begin repaying creditors once it emerges from bankruptcy. Companies typically emerge shortly after they win approval of a reorganization plan, but it is unclear how fast Lehman might emerge.

Bryan Marsal, a restructuring expert who is Lehman's chief executive, told Peck that improved market conditions for merger and acquisition activity give Lehman a golden opportunity to sell assets over the next six to 12 months.

Under Lehman's plan, unsecured creditors could recover 10.4 cents to 44.2 cents on the dollar, general unsecured creditors of the holding company could recover 14.7 cents on the dollar, and creditors of derivatives and commercial paper units could recover 21.9 cents to 44.2 cents on the dollar.

The company is separately suing Barclays Plc , JPMorgan Chase & Co and others to recover tens of billions of dollars of assets for distribution to creditors.

Barclays bought Lehman's main U.S. brokerage business shortly after the bankruptcy. Peck is expected to rule early this year on Lehman's claim that Barclays extracted an $11 billion windfall from this transaction.

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

(Reporting by Caroline Humer and Jonathan Stempel in New York, editing by Dave Zimmerman and John Wallace)

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