* Goldman, others fight to control Lehman's repayment
* Says should not be required to share details on claims
* Bondholders say everyone should follow uniform standards
By Nick Brown
NEW YORK, June 10 Goldman Sachs Group Inc
(GS.N) and other banks fighting for control of Lehman Brothers
Holdings Inc's LEHMQ.PK bankruptcy have joined efforts to
avoid sharing information about claims against the failed
In court papers filed Friday in U.S. Bankruptcy Court in
Manhattan, units of Goldman, Morgan Stanley (MS.N), Deutsche
Bank AG (DBKGn.DE) and others said a proposal by a group of
Lehman bondholders would go "far beyond" bankruptcy rules.
The banks are part of a group proposing a plan to divvy up
about $60 billion in the Lehman estate to pay back creditors of
the company, which filed the biggest bankruptcy in U.S. history
in September 2008. The bondholders, an ad hoc group led by
hedge fund Paulson & Co, have filed a competing plan that would
yield lower returns for the banks.
The bondholders in April were ordered by Judge James Peck,
who oversees the bankruptcy, to disclose key points about their
roughly $20 billion in claims, including the price paid for
those claims. An analysis by the Wall Street Journal found that
Paulson's fund, which bought its Lehman debt at a steep
discount, could make profits of $350 million to $726 million
from the bankruptcy.
The bondholders said all parties should be required to meet
the same disclosure requirements, proposing in May a uniform
standard for anyone trying to influence Lehman's payback plan.
But creditors were quick to object, saying insolvency rules
require broader disclosure from committees than individual
Among the more than 15 parties who have opposed the
disclosures are Bank of America Corp (BAC.N), Barclays Plc
(BARC.L) and the Royal Bank of Canada (RY.TO). [ID:nN09257003]
The latest objections may prove central to the dispute
because the Goldman group is a direct competitor to the
bondholders in efforts to control Lehman's restructuring.
The group has argued that it is loosely affiliated and that
its members have separate attorneys, barring it from committee
status under disclosure rules.
But if disclosure rules do not encompass the banks, other
parts of the bankruptcy code should, the bondholders argue. For
example, a statutory provision allowing judges broad power to
issue orders should be liberally interpreted to give Peck the
power to demand disclosures, they say.
The Goldman group said "burdensome" disclosure is
unnecessary and would discourage creditors from seeking a say
in Lehman's reorganization.
"Even if some minimal benefit could be articulated, it
would be completely outweighed by the chilling effect," the
banks said in Friday's filing.
Other members of the group to sign on to the objection
include Credit Agricole CIB, Credit Suisse International and
the Royal Bank of Scotland PLC. Investment funds including
Angelo Gordon & Co LP and Serengeti Asset Management LP filed
court papers Friday supporting the banks' objection.
A Goldman representative and a company attorney were not
immediately available for comment.
Attorneys for Morgan Stanley and Deutsche Bank also were
not immediately available. A lawyer for Credit Suisse declined
to comment, as did a spokesman for the bondholders.
The matter is set for hearing before Judge Peck on June
The case is In re Lehman Brothers Holdings Inc, U.S.
Bankruptcy Court, Southern District of New York, No. 08-13555.