Lehman secures plan support, inks deal with competing plan proponents

By Caroline Salls

Pittsburgh, July 1 - Lehman Brothers Holdings Inc. said 30 creditors have agreed to vote in favor of its amended plan of reorganization, which also has the support of the company's official committee of unsecured creditors, according to a July 1 filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company said it believes creditors holding more than $100 billion in claims support the proposed plan.

Lehman said many of the parties who have agreed or will agree to support the amended plan were proponents of the alternative plans filed in its bankruptcy case.

In addition, Lehman and substantially all of the alternative plans' proponents have entered into a stipulation under which each party agreed not to prosecute or seek approval of the alternative plans, as well as to stay all pending discovery and not begin any discovery against the other stipulation parties.

The stipulation is subject to bankruptcy court approval.

As previously reported, Lehman said in the amended disclosure statement filed on June 29 that the plan support agreements had not been finalized before the plan was filed.

If the support agreements were not received by the close of business on June 29, Lehman said the plan would have been further amended, potentially affecting the proposed recoveries for some creditor classes.

Also according to the July 1 filing, Lehman has entered into termination and settlement agreements with seven of the 13 largest banks that have filed claims tied to the termination of derivatives contracts and expects to enter into a settlement agreement with an additional bank shortly.

If Lehman does enter into a settlement with the additional bank, the banks will have an allowed $6.2 billion claim against some participating subsidiary debtors as well as guarantee claims in the same amount against the holding company.

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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