Lehman unsecured creditors to get distribution
NEW YORK (AP) — Unsecured general creditors of Lehman Brothers will get $4.6 billion in their first round of payouts from the bankrupt investment bank next month.
Lehman's bankruptcy in September of 2008 marked the start of the global financial crisis and was a major catalyst of the financial meltdown. It was the largest ever bankruptcy in U.S. history, with Lehman listing $639 billion in assets at the time.
Trustee James Giddens filed a notice on Friday about the distribution, which is expected to start around Sept. 10.
Unsecured general creditors had to wait for their distribution as all customer claims were satisfied first. The claims of secured and priority general creditors also were fulfilled.
"That such a distribution is even possible represents an extraordinary achievement that was far from certain when the liquidation began," Giddens said in a statement.
Lehman's individual retail customers were repaid in the first few days of the brokerage's liquidation. But it took several years of negotiations before Lehman Brothers Inc., its holding company Lehman Brothers Holdings Inc., and its European arm, Lehman Brothers International, could agree on how claims for larger customers of each unit, such as hedge funds or institutional investors, would be paid.
The three parts reached an agreement in 2012 and submitted it to the U.S. Bankruptcy Court in New York in February 2013. Judge James Peck approved the agreements in April 2013, settling the disputes among the entities.
Giddens said in a statement that more distributions to unsecured general creditors are expected.
More than $110 billion will have been distributed from the Lehman estate when accounting for customer claims and the first distribution to unsecured general creditors.