Lehman, Hong Kong liquidators settle more than $20 billion of claims

By Caroline Salls

Pittsburgh, Aug. 4 - Lehman Brothers Holdings Inc. and the liquidators for Lehman Hong Kong, one of the largest groups of the holding company's international affiliates, have reached an agreement settling more than $20 billion of intercompany claims between the U.S. debtors and Lehman Hong Kong, according to a news release.

The agreement is subject to approval in the Chapter 11 and Hong Kong proceedings later this year.

In addition, Lehman has secured the support of Lehman Hong Kong for its second amended joint Chapter 11 plan and disclosure statement.

The liquidators for the Hong Kong entities now join Lehman's unsecured creditors committee and other creditor groups representing more than $100 billion in claims in support of the plan.

"This is a genuinely exciting development," Hong Kong liquidator and KPMG China partner Edward Middleton said in the release.

"It is a quantum leap in the progress of the Hong Kong liquidations and I am sure will assist our colleagues in the U.S. as well.

"The settlement, achieved without litigation, provides mechanics that will cut through many of the complexities of our multi-layered relationships and will thereby materially speed up the liquidations, which can only be of benefit to our creditors."

Lehman head of international operations, co-head of derivatives and Alvarez & Marsal managing director Daniel Ehrmann said in the release, "This agreement is another milestone in the case - it resolves more than $20 billion of intercompany claims and contributes significantly to LBHI's recoveries.

"As we have consistently stated, we remain focused on negotiating settlements with our international affiliates and to bringing the estate's plan to a vote and confirmation by year end."

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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