Replies to post #11155 on Lehman Preferred Series "J" Preferred (f

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Lehman gets OK to delay disclosure statement

On Wednesday March 17, 2010, 1:05 pm EDT
By Emily Chasan and John Parry

NEW YORK (Reuters) - A bankruptcy judge said Lehman Brothers Holdings Inc (Other OTC:LEHMQ.PK - News) could delay until mid-April filing a detailed disclosure statement for its proposed plan to end its bankruptcy.

The disclosure statement, which is a necessary step for Lehman to get creditor approval for its plan, would detail Lehman's current state of affairs and provide financial information to creditors.

Judge James Peck approved Lehman's request to delay the filing of the statement at a hearing in U.S. Bankruptcy Court in Manhattan on Wednesday.

Lehman, which filed its reorganization plan on Monday, had sought a 30-day delay so it could include recent findings by Lehman's court-appointed examiner, among other things.

Lehman's reorganization plan to repay creditors said it would seek to create a new asset manager business called LAMCO that would specialize in management of Lehman's long-term commercial real estate, private equity, and other illiquid assets.

Harvey Miller, Lehman's lead bankruptcy attorney, said in court on Wednesday that it is planning to start meetings with creditors to negotiate over its reorganization plan "very quickly."

Lehman's creditors are seeking more financial information and data on the full amount of claims filed against Lehman, so the groups can negotiate ahead of the filing of the disclosure statement, Dennis Dunne, an attorney for Lehman's Official Committee of Unsecured Creditors, said at the hearing.

Judge Peck also said Lehman could enter a settlement agreement with JPMorgan Chase & Co (JPM - News) stemming from a $7.68 billion claim related to collateral held by JPMorgan after Lehman's bankruptcy filing in 2008.

Lehman said last month it would pay JPMorgan $557 million in exchange for settling the claim and returning collateral with billions in face value to Lehman's bankruptcy estate.

Lehman's attorneys said in court on Wednesday that the collateral is illiquid, and related to long-term Lehman investments that include partially built projects, and real estate, among other things. Lehman expects it will be able to maximize the value of the assets better itself, the attorneys said.

Despite the settlement, JPMorgan and Lehman could still face future litigation over the claims.

The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.

(Reporting by Emily Chasan and John Parry; Editing by Tim Dobbyn)