Lehman Brothers Holding Inc. plans to raise as much as $65 billion for creditors and begin making distributions next year, Chief Executive Officer Bryan Marsal said in an interview on CNBC.
Lehman is working on a revised liquidation plan and will recover $60 billion to $65 billion for creditors from its assets, Marsal said today. He expects to begin making distributions in the first quarter of 2012.
“There undoubtedly will be some holdouts, but I think we’re going to a have a plan that’s going to get the blessing” of creditors, Marsal said.
Lehman, which filed for bankruptcy in 2008, is competing against two rival proposals to pay creditors. One is backed by a group of bondholders, including hedge fund Paulson & Co. and the California Public Employees’ Retirement System. Another is from a creditor group that includes Goldman Sachs Group Inc., Deutsche Bank AG and Morgan Stanley. The groups are clashing over how to distribute Lehman’s assets and how much to pay various groups of creditors.
Lehman is negotiating with those creditor groups to resolve their opposition to its existing proposal, Kimberly Macleod, Lehman’s spokeswoman, said today in a phone interview. Any agreement could be the basis of a revised Lehman plan, she said.
Defending 350 Workers
In the CNBC interview, Marsal defended employing about 350 former Lehman workers, saying they know the history of the firm’s assets.
Lehman has raised between $25 billion and $27 billion in cash so far, he said. Lehman will sell assets “in a responsible way” and won’t be “dumping” them onto the market, he said. Lehman’s commercial assets are rising in value, Marsal said. Investments in private equity are “very slow,” though they’re coming back, he said.
“Almost across the board, we’ve seen our values improving over the last 12 months,” he said.
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).