Lehman emerges from bankruptcy

Diane Alter – AHN News Reporter

New York, NY, United States (AHN) – Lehman Brothers Holding Inc. emerged from bankruptcy Tuesday by beginning to pay creditors as stipulated in a plan set up by the court on Dec. 6.

The biggest creditors with a combined $ 138 billion were Citigroup and Bank of Mellon Corp as indebted trustees (they sold the bonds). Japan’s Aozora Bank was owed $ 463 million in unsecured debt.

Actual payments will not start until April 17. Those creditors that cannot or will not wait can sell their claims to others before March 18.

Estimates suggest that Lehman bondholders will initially pocket some $ 10 billion, and $ 65 billion in all. That’s a far cry from the $ 639 billion in assets Lehman had on its books in September 2008 when it filed Chapter 11. Lehman then reported $ 613 in liabilities, with about $ 155 billion in bond debt.

Lehman Brothers holds the distinction as being the biggest bankruptcy in U.S. history and the biggest Wall Street failure.

The legal costs of Lehman’s bankruptcy were approximately $ 1.6 billion as of Jan. 31.

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