#AceFinanceNews – UNITED STATES (New York) – August 15 – Unsecured creditors of Lehman Brothers Holdings’ brokerage unit who have waited nearly five years to recoup their money will begin receiving an initial $4.62 billion payout next month, the trustee liquidating the unit said Friday.
Trustee James Giddens said distributions would begin on Sept. 10 and cover 17 percent of the $27.2 billion of unsecured claims associated with the Lehman Brothers unit.
About $3.47 billion will go to creditors whose claims have been deemed valid, and $1.15 billion will be set aside for pending claims.
The payout follows distributions of $105 billion to 111,000 former customers, who have been paid in full, and other creditors whose claims had higher priority.
In a statement, Giddens said a payout to unsecured creditors had been "far from certain" when the brokerage liquidation began soon after Lehman went bankrupt on Sept. 15, 2008. More payments to unsecured creditors are expected, he said.
Giddens’ recovery efforts suffered a setback on Aug. 5 when a federal appeals court said Barclays Plc was entitled to retain $5.9 billion in disputed assets as part of its hurried purchase of much of Lehman’s brokerage unit.
Lehman was Wall Street’s fourth-largest investment bank before seeking Chapter 11 protection.
It reported $639 billion of assets, in what remains the largest U.S. bankruptcy.
By Reuters with Contributions CNBC