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Lehman may use non-cash assets for some disputed claims reserves
By Lisa Kerner
Charlotte, N.C., Feb. 22 - Lehman Brothers Holdings Inc. was granted court approval to use non-cash assets in lieu of available cash as reserves for disputed claims under its plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
As previously reported, the plan allows the administrator to release the available cash for distribution to holders of allowed claims and use non-cash assets to fund the reserves if it determines that the value of the company's assets, other than available cash, exceeds the amount of available cash needed for the disputed claims reserve.
A participating debtor must retain at least 25% of the reserve amount in available cash.
Also, the ratio of the value of the participating debtor's non-cash assets to the amount equal to the reserve amount minus the minimum cash reserve must be at least 2.5 to 1.0.
Lehman cannot substitute non-cash assets for cash that has been redistributed under a plan adjustment or subordinated debt redistributions and is to be reserved for holders of disputed claims.
New York-based Lehman Brothers Holdings 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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