Lehman Debt Trades Fell to $1.9 Billion in January From $3.6 Billion

Lehman Brothers Holdings Inc. (LEHMQ) investors traded about $1.9 billion of the defunct investment bank’s debt last month as they awaited news of their first payout after three years of bankruptcy, down about 47 percent from more than $3.6 billion in December.

Lehman debt accounted for 85 percent of all trading in claims on bankrupt companies in January, SecondMarket Holdings Inc. said in a report released today. Wireless company DBSD North America Inc., which Dish Network Corp. has agreed to buy, placed second on the list of largest amounts traded, with a single transaction of $110.4 million, the report said.

Lehman said on Jan. 28 it may initially distribute $8.1 billion to $10.7 billion this quarter to creditors, ranging from Goldman Sachs Group Inc. (GS) to individual bondholders. A judge in December approved a $65 billion liquidation plan that would pay the average creditor less than 18 cents on the dollar in the next few years.

There were 597 trades in Lehman debt in January. Filene’s Basement LLC had the second most trades, at 71, for a total face value of $2.2 million. There were eight trades in claims on Los Angeles Dodgers LLC, totaling $142,431, according to the report.

All amounts refer to the face value of the claims, not the trading prices, which reflect payment prospects and aren’t disclosed.

December trades in Lehman debt exceeded $3.6 billion, out of $3.8 billion of total claims traded during the month, SecondMarket said.

Once the world’s fourth-biggest investment bank, New York- based Lehman filed the biggest U.S. bankruptcy in history in 2008 listing debt of $613 billion.

The 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

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

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