Fuld, Lehman Execs to Settle Investor Lawsuit
Richard Fuld
Andrew Harrer/Bloomberg
Richard Fuld, former chairman and chief executive officer of Lehman Brothers Holdings Inc.
Richard Fuld, former chairman and chief executive officer of Lehman Brothers Holdings Inc. Photographer: Andrew Harrer/Bloomberg
Lehman Brothers Holdings Inc. (LEHMQ) executives including former Chairman Richard Fuld will settle an investor lawsuit using a $90 million payment from the defunct firm’s insurers, according to a court filing.
The investors blamed Lehman officers and directors for losses on Lehman stock and options from June 12, 2007, to Sept. 15, 2008, according to the filing in U.S. Bankruptcy Court in Manhattan. Fuld, 65, was chief executive officer of New York- based Lehman, once the fourth-largest U.S. investment bank, before its 2008 bankruptcy.
A bankruptcy examiner said Lehman foundered because of too much debt, which it tried to hide from investors, and risky real estate investments.
Patricia Hynes, a lawyer for Fuld, didn’t immediately respond to an e-mail seeking comment.
Lehman said in November that Fuld would get $10 million from insurers as part of an officers-and-directors program paying for the costs of lawsuits. It also said insurers would be asked to pay as much as $90 million in costs for unidentified defendants in civil, criminal and regulatory proceedings.
Lehman has asked the judge to modify bankruptcy law on nine previous occasions to tap its directors-and-officers insurance, according to yesterday’s filing.
The bankruptcy case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net. Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.
To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.
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