ETF News

UPDATE 2-Lehman sees bankruptcy plan confirmation in Q1

* Progress in narrowing claims by more than half

* Expects to cut headcount by 6 percent by April

* Targets year’s end for reorganization plan proposal (Updates with Lehman comment on Archstone)

NEW YORK, Sept 22 (Reuters) - Bankrupt investment firm Lehman Brothers Holdings Inc LEHMQ.PK is "optimistic" that its reorganization plan will be confirmed by the end of the first quarter, according to a securities filing on Wednesday.

The company has worked to slash claims on the estate and said its differences with creditors are “narrowing.”

Lehman filed for Chapter 11 two years ago, in the largest-ever U.S. bankruptcy. British bank Barclays Plc BARC.L bought Lehman's main U.S. brokerage business after the bankruptcy filing, and Lehman's other assets are being managed and unwound while operating under bankruptcy protection.

Though not officially settled, Lehman said it has made progress in narrowing the amount of claims from third parties, affiliates and others by more than half, to $464 billion from almost $1.2 trillion. It said big-bank claims resolution will be a “major challenge” for 2011.

Lehman has been looking to cut costs as it winds down operations. It expects to reduce staff by 6 percent to 500 people as of April 11.

Within the next 60 days, Lehman hopes to complete talks and agreements with affiliates and administrators. Lehman also said it is targeting the year’s end for completing its final reorganization plan proposal. If the proposal is confirmed, it would clear the way for the company to emerge from bankruptcy.

Lehman plans to wind down its remaining assets and operations and emerge as a newly created business called Lamco. Lamco would manage what is left of Lehman’s commercial real estate and other assets. The proposal is subject to court approval.

Earlier this week, Lehman creditors in a footnote in court documents referenced a possible sale of apartment complex owner Archstone, one of its largest assets, to its affiliated Lehman Commercial Paper Inc and Luxembourg Residential Properties Loan Finance Sarl.

An attorney for the creditors did not explain the basis for his statement, which was contained in a one-sentence footnote in a Monday court filing, or return a request for comment.

“We’re not selling Archstone,” said Lehman spokeswoman Kimberly Macleod. “It’s a core holding for which we see significant recovery potential.”

Archstone was the second-largest U.S. real estate investment trust before being bought for $22.2 billion in 2007, adding hundreds of prime apartment buildings and billions of dollars of new debt to Lehman’s books.

Lehman owns 47 percent, while Barclays and Bank of America Corp BAC.N own another 47 percent. (Reporting by Jonathan Stempel and Chelsea Emery. Editing by Phil Berlowitz and Robert MacMillan)