Lehman Commercial Paper looks to buy $59.28 million loan participation

By Caroline Salls

Pittsburgh, Sept. 17 - Lehman Commercial Paper, Inc. requested court approval to purchase a $59.28 million participation in the FairPoint Communications term loan A for 76.25% of its value from Variable Funding Trust 2008-I, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

If the value of the participation is still $59.28 million on the purchase date, Lehman said its purchase price would be $45.2 million.

Lehman said the FairPoint participation must be sold at the current prevailing market rate under a settlement with The Metropolitan Life Insurance Co.

However, Lehman Commercial Paper said it believes that the sale of the FairPoint participation to a third party at the current market price would likely result in its sale at a significant discount to its intrinsic value.

As a result, the company said it is in the best interest of its estate to purchase the participation from the security trust.

A hearing is scheduled for Oct. 14.

Lehman Commercial Paper filed for Chapter 11 bankruptcy on Oct. 5, 2008. The case is being jointly administered under the Lehman Brothers Holdings, Inc. case, number 08-13555.

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