BANKRUPTCY PLAYS

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Lehman cash rose to $15.7B Sep 30...

Lehman Pays $417.4 Million to Bankruptcy Advisers (Update1)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aaLQzde.i5ak

By Linda Sandler

Oct. 15 (Bloomberg) -- Lehman Brothers Holdings Inc., the investment bank liquidating in bankruptcy, paid its advisers $417.4 million for 12 months of work, according to a filing with the U.S. Securities and Exchange Commission.

Restructuring firm Alvarez & Marsal LLC, which provided Lehman with its current chief executive officer, Bryan Marsal, led the payments with $169.2 million in fees through Sept. 30. Weil Gotshal & Manges LLP of New York, the investment bank’s lead bankruptcy-law firm, was paid $98.5 million, Lehman said in yesterday’s filing.

Lehman’s payments to advisers, though trimmed by a fee examiner, haven’t faced major challenges like bankrupt automaker Chrysler LLC, which is using U.S. Treasury loans to wind itself down. Government lawyers yesterday objected to $5 million in fees charged by the old Chrysler’s lawyers including lead bankruptcy adviser Jones Day.

Cash on hand at Lehman and its affiliates rose to $15.7 billion by Sept. 30, from $14.7 billion at the start of the month and $2.5 billion when it filed for bankruptcy.

Lehman filed the biggest U.S. bankruptcy in September 2008 with assets of $639 billion. Creditors including UBS AG, the New York Giants and Abu Dhabi Investment Authority filed more than 16,000 claims against the collapsed bank before last month’s court-imposed deadline.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter responsible for this story: Linda Sandler in New York at [e-mail].

Last Updated: October 15, 2009 09:43 EDT