Lehman out of bankruptcy, will repay creditors from April

Lehman Brothers Holdings formally emerged from its record $639-billion bankruptcy on Tuesday and said it would start paying back creditors on April 17.

The move puts an end to the bankruptcy proceeding that began on September 15, 2008, when Lehman collapsed and rocked the foundations of the global financial markets, catalysing the a recession.

Exactly 1,268 days later, the end of the case enables Lehman to start distributing about $65 billion to creditors who had asserted more than $300 billion in claims.

Bankruptcy judge James Peck approved Lehman’s creditor payback plan in December. Since then, the company has tied up loose ends — selling assets, litigating claims and settling disputes with affiliates and counterparties.

The bank has about $18 billion in cash, it said. In theory, it could give creditors $12 billion to $14.7 billion initially, depending on how much cash it needs to reserve for disputed claims, it told a judge in a US bankruptcy court in Manhattan.