Lehman Brothers Holdings Inc said it will take longer than expected to win approval of a bankruptcy plan, and projects paying out $60.1 billion as it tries to settle differences with creditors owed six times that amount.

Harvey Miller, a lawyer for Lehman, told U.S. Bankruptcy Judge James Peck at a hearing in Manhattan on Thursday that the company hopes to file a revised Chapter 11 plan in seven to 10 days, and win court approval well before the end of the year.

Miller, a partner at Weil Gotshal & Manges LLP, said Lehman's earlier goal to win approval of a bankruptcy plan by the end of March is no longer feasible.

According to a regulatory filing, Lehman expects to have about $60.1 billion of assets, up from the $57.5 billion it estimated six months earlier, to distribute to creditors once it emerges from its now 28-month-old bankruptcy.

Lehman said the judge will likely let creditors pursue $322 billion of their estimated $369 billion of claims. It said a significant amount of claims are unresolved, including $40.3 billion tied to derivatives.

The company still needs an accord with 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

Bryan Marsal, Lehman's chief executive and a principal at restructuring firm Alvarez & Marsal LLC, told Peck that improved market conditions for mergers and acquisitions give Lehman a golden opportunity to sell assets over the next six to 12 months.

Lehman can start repaying creditors once it emerges from bankruptcy. A company typically emerges shortly after it wins approval of a reorganization plan, but it is unclear how fast Lehman might emerge.

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)