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| Lehman creditors to be offered payout plan: report |
| Press Trust of India / New York Oct 05, 2009, 18:09 IST |
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Lehman Brother's creditors in London will be approached by the bankrupt financial firm's administrator to join a payout plan, which seeks to directly return assets to them, a media report says.
According to a report in The Wall Street Journal, Lehman Brothers Holdings Inc's hedge-fund creditors' who have $16 billion stuck with the bankrupt securities firm, would be asked to join in a payout plan by the administrator.
"The administrator for Lehman's operations in London plans to seek permission to remove the claims from UK courts and dole out assets directly to creditors, if enough hedge funds are willing to go along with the move," the report said.
The joint administrator of Lehman Brothers International (Europe) and a partner at PricewaterhouseCoopers, Steven Pearson said in an interview to the daily that he hopes to gain the support of 90 per cent of creditors for the plan.
He added, it would reduce the risk that creditors who do not participate could file claims later against those who do.
The assets have been frozen since Lehman tumbled into bankruptcy in September 2008, frustrating some hedge funds that had made trades through the firm before it collapsed.
In August, the UK High Court had denied Lehman administrator's plan to begin returning the hedge-fund assets in the first quarter of 2010.
Under the proposal set to be announced, creditors who agree in writing would be bound to the plan and support from a large majority of creditors would let the administrator set a time frame to release the assets, the report added.
Lehman's London unit has assets valued at about $9.5 billion and the administrator is also seeking $6.9 billion elsewhere for the firm.
The creditors' committee in the UK bankruptcy case include hedge-fund managers Ramius LLC, GLG Partners LP and Oceanwood Capital Management LLP.
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