Feb 13 Lehman Brothers Holdings Inc settled with
Freddie Mac a $1.2 billion claim, freeing up millions
of dollars which will be available for distribution to the
Under the settlement, Lehman will make a one-time cash
payment of $767 million to Freddie Mac, Lehman said in a court
filing on Wednesday.
The dispute stems from two loans extended to Lehman by
Freddie Mac in the months before the bank filed for bankruptcy.
Lehman was scheduled to repay the loan on Sept. 15, 2008, the
day it filed for the biggest-ever bankruptcy.
Lehman had set aside $1.2 billion to cover the claim as a
general unsecured claim, but Freddie Mac argued that the claim
should get priority status.
A priority claim would have allowed the
government-controlled mortgage agency to be paid before several
Once Wall Street's fourth-largest investment bank, Lehman's
bankruptcy was a major trigger for the 2008 global financial
Lehman emerged from Chapter 11 in March 2012 under a plan
that could eventually return $65 billion to creditors. The
company is winding down, a process expected to take a few years.
The case is In re:Lehman Brothers Holdings Inc, U.S.
Bankruptcy Court, Southern District of New York, No. 08-13555