Lehman administrator files record bankruptcy plan
NEW YORK: The administrator for failed Wall Street giant Lehman Brothers has filed plans to end the largest bankruptcy in US history, opening the way for the creation of a new company.
"The proposed plan represents a fair economic resolution for all Lehman creditors and will accelerate recoveries to creditors," said Bryan Marsal, chief executive and chief restructuring officer of Lehman Brothers Holdings, in a statement on Monday.
The plan also tries to avoid "unnecessary, extended and expensive litigation that could adversely impact recoveries to creditors," Lehman Brothers added in its filing.
Lehman collapsed in September 2008 in the largest bankruptcy in history, triggering a financial shockwave that dragged the global economy into recession.
The new plan is likely to lead to a fight over claims from creditors that total a whopping 875 billion dollars, much of which would be written off under the reorganization.
The 93-page filing in New York bankruptcy court calls for the creation of a new entity called LAMCO, which would carry on in asset management specializing in the commercial real estate, residential mortgages and other activities to help pay off creditors.
A large portion of Lehman's assets were acquired by British bank Barclays for 250 million dollars in a deal that has since faced considerable criticism as unfairly advantageous for Barclays.