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Lehman receives OK to delay disclosure statement
NEW YORK |
NEW YORK (Reuters) - A bankruptcy judge said on Wednesday Lehman Brothers Holdings Inc LEHMQ.PK could delay until mid-April filing a detailed disclosure statement for its proposed plan to end its bankruptcy.
The disclosure statement, which is a necessary step for Lehman to get creditor approval for its plan, would detail Lehman's current state of affairs and provide financial information to creditors.
Judge James Peck approved Lehman's request for a delay at a hearing in U.S. bankruptcy court in Manhattan on Wednesday.
Lehman, which filed its reorganization plan on Monday, sought a 30-day delay so it could include recent findings by Lehman's court-appointed examiner, among other things.
The reorganization plan to repay creditors would create a business called LAMCO that would manage Lehman's long-term commercial real estate, private equity, and other illiquid assets.
Harvey Miller, Lehman's lead bankruptcy attorney, said in court on Wednesday that it is planning to start "intensive" meetings with creditors to negotiate over its reorganization plan "very quickly."
"There's enormous pressure from (Lehman chief executive Bryan) Marsal, who is very anxious that we move forward and get this train out of the station," Miller, an attorney at Weil Gotshal & Manges, told the court.
Lehman's creditors are seeking more financial information and data on the full amount of claims filed against Lehman, so the groups can negotiate ahead of the filing of the disclosure statement, Dennis Dunne, an attorney for Lehman's official committee of unsecured creditors, said at the hearing.
SETTLEMENT WITH JPMORGAN
Judge Peck also said Lehman could enter a settlement agreement with JPMorgan Chase & Co (JPM.N) stemming from a $7.68 billion claim related to collateral held by JPMorgan after Lehman's bankruptcy filing in 2008.
"This is perhaps the largest transaction to come down the pike since we filed the bankruptcy case 18 months ago," Judge Peck said at the hearing, asking if anyone could determine what the collateral was worth today.
Lehman said last month it would pay JPMorgan $557 million in exchange for settling the claim and the return of collateral with billions in face value to Lehman's bankruptcy estate.
Lehman's attorneys said in court on Wednesday that the collateral is illiquid, and related to long-term Lehman investments that include partially built projects, and real estate, among other things. Lehman expects it will be able to maximize the value of the assets better itself, the attorneys said.
Despite the settlement, JPMorgan and Lehman could still face future litigation over the claims.
The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Emily Chasan and John Parry; Editing by Tim Dobbyn and Steve Orlofsky)
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