Lehman Brothers Holding Inc.’s Australian unit sought federal court approval for a creditors’ vote on a proposed claims settlement that will see them getting less than half of what they are owed, a litigation funder said.
Creditors will be paid between 39.9 Australian cents and 49.2 cents for each dollar of debt in the local currency, IMF (Australia) Ltd. said in a statement today. U.S. insurers agreed to pay $45 million to fund the settlement, and IMF will drop a class action lawsuit against the firm as part of the agreement, outlined in an April 12 filing, according to the statement.
Lehman Brothers Australia appointed a voluntary administrator under the country’s bankruptcy laws on Sept. 26, 2008, after Lehman Brothers Holdings, then the fourth-largest investment bank in the world, filed for bankruptcy. The securities firm had $613 billion in debt, making it the biggest bankruptcy in U.S. history.
The Australian unit has assets of between A$297 million ($312 million) and A$303 million and creditors are owed between A$596 million and A$654 million, according to the IMF statement. IMF’s clients are owed A$143.5 million, it said.
PPB Advisory, liquidators of the Lehman unit, plan to ask for approval of the meeting of creditors to vote on the proposed settlement at a May 7 hearing, according to the statement.
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