Lehman tweaks plan to include JPMorgan statement, address objections

By Caroline Salls

Pittsburgh, Aug. 25 - Lehman Brothers Holdings Inc. filed a revised version of its second amended joint Chapter 11 plan and disclosure statement ahead of Tuesday's disclosure statement hearing, according to an Aug. 25 filing with the U.S. Bankruptcy Court for the Southern District of New York.

There were no changes to proposed creditor recoveries under the revised documents.

The revised disclosure statement includes a new paragraph requested by the JPMorgan entities.

According to that paragraph, JPMorgan did not participate in the drafting of the revised disclosure statement and disagrees with some of the descriptions and characterizations of transactions, litigation, notes, securities, collateral and other matters affecting JPMorgan.

Specifically, the statement said JPMorgan disagrees with descriptions and characterizations related to a collateral disposition agreement (CDA), a JPMorgan adversary proceeding, claims held by JPMorgan, the company's derivatives framework, the examiner's report and the notes and securities issued by Fenway, Spruce, Verano, Pine, the Racers trusts, SASCO 2008-C2 and Kingfisher.

In addition, JPMorgan "reserved the right to seek findings of fact and conclusions of law that are inconsistent with such descriptions and characterizations."

JPMorgan said in the revised disclosure that it did not participate in the proposed resolution of substantive consolidation issues and other disputes to be implemented through the plan, including provisions reducing the allowed claims and recoveries for Racers MM notes, Fenway notes and related claims.

JPMorgan also reserved the right to claim that the valuation of those notes and related claims, as well as any property returned or transferred to Lehman under the CDA, should not be affected by compromises included in the plan.

According to the revised disclosure statement, Lehman also made changes to address some of the U.S. Trustee's objections that raised "various concerns over several sections of the disclosure statement."

U.S. Trustee Tracy Hope Davis objected to the disclosure statement on Aug. 11, arguing that the statement does not give voting creditors enough information on several parts of the plan.

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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