Lehman inks $37 million agreement in principle with Syncora and Sasco

By Caroline Salls

Pittsburgh, July 22 – Lehman Brothers Holdings Inc. reached an agreement in principle with Syncora Holdings Ltd. wholly owned subsidiary Syncora Guarantee Inc. and Structured Asset Securities Corp. (Sasco) for the settlement of Syncora’s sole existing claim and related litigation with Lehman and Sasco, according to a Syncora news release.

If completed, Syncora said the terms of the settlement will resolve all claims it filed on Jan. 13, 2010 against Lehman and Sasco in the U.S. Bankruptcy Court for the Southern District of New York in connection with a GreenPoint Mortgage Funding Trust 2006-HE1 transaction, in return for an allowed unsecured claim of $37 million in the Lehman bankruptcy estate.

In a June 9 notice regarding the 10th distribution under its joint Chapter 11 plan, Lehman said its bankruptcy estate is projecting cumulative payments of roughly $0.36 on the dollar to be paid on allowed unsecured claims, but Syncora said that projection is subject to change.

The settlement remains subject to final definitive documentation.

Syncora said this settlement is separate from a lawsuit filed by indenture trustee U.S. Bank, NA against GreenPoint in connection with alleged breaches of representations and warranties by GreenPoint. That case remains pending in state court.

Based in New York, Lehman Brothers Holdings handles all bankruptcy-related actions from the former Lehman Brothers Inc., a financial services company.

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