Lehman wants court to OK settlement related to swap transactions

By Lisa Kerner

Charlotte, N.C., Sept. 21 - Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing Inc. asked the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement with Société Générale, New York Branch relating to swap transactions with two special purpose entities: Libra CDO Ltd. and MKP Vela CBO, Ltd., according to a Tuesday court filing.

If the settlement agreement is approved, Lehman Brothers Special Financing's estate is likely to recover at least $445 million and preserve the right to pursue the remaining assets in Libra and Vela against the other parties to the transactions, the filing said.

The settlement would maximize Lehman Brothers Special Financing's opportunity to potentially recover up to an additional approximately $72 million.

Also, it will put Lehman Brothers Special Financing in a better position to request that the Libra trustee promptly return approximately $128 million in collateral that the company posted with Libra before its bankruptcy filing, Lehman said.

A hearing is scheduled for Oct. 20.

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. Its Chapter 11 case number is 08-13555.

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