Lehman Brothers Holdings Inc. said Wednesday that it has agreed
to sell another $2.5 billion in bankruptcy claims that the failed
investment bank holds against its U.S. brokerage arm.
Lehman has been selling off the unsecured creditor claims in
recent months as it continues to wind down its holdings, a process
that is expected to continue for several more years. In September,
Lehman agreed to sell $2.5 billion in claims for about 25% of their
face value.
Lehman, once the nation's fourth-largest investment bank by
assets under management, collapsed into the largest bankruptcy ever
in September 2008, with $613 billion in liabilities. Most of
Lehman's brokerage business was sold to Barclays PLC, and the
holding company officially exited bankruptcy in 2012. What remains
of Lehman's brokerage unit is being wound down separately from the
holding company.
The claim sales, which would raise funds to pay off the billions
Lehman owes its customers and creditors, have turned attention to
the little-noticed world of bankruptcy-claims trading, where
billions of dollars in claims trade each month as distressed-debt
investors buy up claims from creditors on the cheap and then jockey
for a position to receive payment.
Lehman brokerage customers received about $92.3 billion almost
immediately after Lehman collapsed, and since then total
distributions have exceeded $110 billion, representing a 100%
recovery for customers and priority creditors. However, unsecured
creditors are receiving just a portion of their claims.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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