Lehman Brothers has reached a $6.6 billion settlement with creditors of its German foreign affiliate, Lehman Brothers Bankhaus, Financial Times reports. Lehman’s bankruptcy manager, Alvarez & Marsal, has suggested a compromise plan that will reduce payments to foreign affiliates and redistribute some of that to senior bondholders. The plan will reduce foreign affiliates’ claims to zero if other creditors, including banks, which had derivatives contracts with Lehman, and Lehman’s bondholders, accepted the plan and the affiliates did not agree to the settlement. Bankhaus will limit its $25 billion in claims to $6.6 billion and support Lehman’s plan, which will still pay foreign affiliates more than bondholders.
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