Lehman Brothers Estimates Available Creditor Cash is About $18 Billion
By Linda Sandler – Feb 16, 2012 9:25 AM ET
Lehman Brothers Holdings Inc., which is planning its first payment to creditors after more than three years in bankruptcy, said it has about $18 billion of cash available for distribution.
The defunct investment bank estimated that allowed claims of general unsecured creditors are about $284 billion. In theory, Lehman said it could distribute $12 billion to $14.7 billion of cash initially, depending on how much it needs to keep in reserve for disputed claims, according to a filing in U.S. Bankruptcy Court in Manhattan yesterday. The cash holdings are based on year-end numbers, it said.
Lehman, whose creditors range from Goldman Sachs Group Inc. (GS) to individual bondholders, said the calculations were “illustrative” only. Last month, Lehman said it may initially distribute $8.1 billion to $10.7 billion in a payment planned for this quarter.
To boost the payment to the higher end of the range, Lehman has asked a judge to let it keep non-cash assets as reserves for disputed claims. It is in talks with large claimholders to try to win their agreement for the plan, Lehman told the judge at a court hearing yesterday.
Last month, Lehman said it would make a total of about $56 billion in distributions over the next few years. It put disputed claims at $112 billion.
Previously, Lehman Chief Executive Officer Bryan Marsal has said he intends to raise $65 billion from the firm’s assets in the next few years, giving the average creditor less than 18 cents on the dollar for estimated claims of $370 billion.
Lehman, which in 2008 filed the biggest bankruptcy in U.S. history, has winnowed down claims from 67,000 filed originally demanding about $1.2 trillion from what was once the fourth- largest investment bank. It filed for bankruptcy with $613 billion in debt under former Chairman Richard Fuld.
To contact the reporter on this story: Linda Sandler in New York at firstname.lastname@example.org