Lehman: 'situation is stable with good progress on all fronts'

By Caroline Salls

Pittsburgh, Nov. 18 - Lehman Brothers Holdings, Inc. told the bankruptcy court Wednesday that its "situation is stable with good progress on all fronts," and the company expects to prepare a plan of reorganization outline by the first quarter of 2010, according to a presentation filed with the Securities and Exchange Commission.

Lehman said its key challenges include the resolution of intercompany issues and the "sheer volume of legal issues that may need to be addressed."

According to the presentation, those challenges include the fact that the holding company still does not have access to transaction activity at Lehman Brothers Inc. or its clearing banks.

Also, Lehman said a significant number of primary claim legal issues will confront the estate in 2010, compounded by numerous secondary claim disputes that may overburden the court.

In addition, the company said its bar date has passed, and the "claims picture is coming into focus."

Specifically, Lehman said more than 64,000 claims have been filed with a face amount in excess of $820 billion.

The company said 77% of those claims and 81% of the face amount were filed against Lehman Brothers Holdings, Inc., and 98% of the face amount of claims is contained in the "top 5 debtors."

Lehman said it expects to file initial claims objections in the next 30 to 45 days.

In regards to asset management, Lehman said its illiquid assets are being managed for "reasonable disposition in an improving market," and unfunded commitment exposure has been reduced by $24 billion or 65% since the company's bankruptcy filing at minimal cost to the estate.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 08-13555.

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