Lehman Says Creditors Back Amended Plan and Disclosure Statement
Bryan Marsal
Alvarez & Marsal via Bloomberg
“Our goal from the outset has been a fair economic compromise that expedites administration of these cases and provides the best outcome for creditors,” Lehman Chief Executive Officer Bryan Marsal said in the statement.
“Our goal from the outset has been a fair economic compromise that expedites administration of these cases and provides the best outcome for creditors,” Lehman Chief Executive Officer Bryan Marsal said in the statement. Source: Alvarez & Marsal via Bloomberg
Lehman Brothers Holdings Inc. creditors holding more than $100 billion in claims signed their support for the company’s latest payout plan, which allots more money to a group including Goldman Sachs Group Inc. (GS) and less to bondholders including Paulson & Co.
Thirty institutions and some affiliates -- including the Goldman Sachs and Paulson groups that proposed rival plans to pay Lehman’s debts -- put that support in writing, Lehman said in a statement today. The Goldman Sachs group includes Silver Point Capital LP and Morgan Stanley. (MS) The Paulson group includes the California Public Employees’ Retirement System, or Calpers.
The compromise reached after contentious battles by Lehman Chief Executive Officer Bryan Marsal and negotiators including lawyer Lori Fife of Weil Gothal & Manges LLP, Lehman’s bankruptcy law firm, ends the threat of “protracted litigation” over the plan, Lehman said.
“It is extraordinary to have support from over $100 billion of claims held by people with such divergent views,” said Fife in a telephone interview today. “There were intensive negotiations.”
Lehman aims to confirm its plan by year end and start distributing a “significant” amount of its $21 billion in available cash shortly after, Fife said.
“It’s possible that we’ll start distributing by the end of the year, but more likely in the first quarter,” she said. Some disputed claims still need to be resolved, she said.
Illiquid Assets
Lehman’s bankruptcy may drag on a while, as executives try to sell illiquid assets including $13.2 billion of real estate. Property sales will run through 2014, after sales of $3 billion through March, Lehman said in filings this week.
Once the world’s fourth-biggest investment bank, Lehman fought the Paulson group and the rival Goldman Sachs group of derivatives creditors for months over control of its liquidation plan. Lehman, which entered bankruptcy almost three years ago, twice amended its proposals to pay claims in response to creditor challenges. After the Paulson group successfully fought for more money, the Goldman Sachs group revolted, publishing its rival plan. The final proposal takes some money from bondholders to give to derivatives creditors.
“Our goal from the outset has been a fair economic compromise that expedites administration of these cases and provides the best outcome for creditors,” Marsal said in a statement. “This plan achieves that objective.”
Marsal aims to raise a total of $65 billion from the firm’s assets, including the cash already in hand. He has previously estimated final claims at about $322 billion.
Lehman filed for bankruptcy in 2008 with assets of $639 billion.
The case is In re Lehman Brothers Holdings Inc. (LEHMQ), 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Christopher Scinta in London at cscinta@bloomberg.net; Linda Sandler in New York at lsandler@bloomberg.net
To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net; John Pickering at jpickering@bloomberg.net
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