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Creditors agree to Lehman pay plan

LEHMAN Brothers has won support for its latest payout plan from more than 150 creditors holding about $US450 billion in claims, moving it closer to paying some of its debt.

LEHMAN Brothers has won support for its latest payout plan from more than 150 creditors holding about $US450 billion in claims, moving it closer to paying some of its debt.

Lehman, which filed the biggest bankruptcy in US history $US613 billion in September 2008, said it could probably get a judge's approval for a $US65 billion liquidation plan this month, with the first distributions early next year.

The company, with creditors ranging from JPMorgan Chase to the New York Giants and individual bondholders, gave its vote count in court filings yesterday after a November 4 voting deadline.

Australian banks and superannuation funds as well as numerous shire councils are among the creditors that filed claims with Lehman's liquidators after it collapsed in 2008.

Among the scores of Australian-based creditors named in court documents are ANZ, National Australia Bank, Commonwealth Bank, Macquarie Bank, MLC Investments, Australian Super, the Health Employees Superannuation Trust, the Insurance Commission of Western Australia, the trustees of the De La Salle Brothers, Gowing Bros Ltd, and Equity Trustees as trustee for the PIMCO Funds.

Lehman quickened its effort to get out of bankruptcy in July, after being mired in disputes as it neared three years in Chapter 11 proceedings.

The defunct company settled a fight with creditors by allotting more money to a group including Goldman Sachs and less to bondholders such as Paulson & Co.

"Reaching a mutual agreement among these disparate parties was complex and challenging," Lehman chief executive Bryan Marsal said.

The plan was accepted by every class of creditor that voted, Lehman said. In all, 95 per cent of creditors backed the payout scheme and related settlements.

But disputes remain.

Lehman last month subpoenaed Goldman Sachs for documents relating to derivatives claims. Deutsche Bank, after backing Lehman's third payout proposal, said the plan would not succeed unless Lehman upgraded $US2.4 billion in claims held by Deutsche.

Many banks are fighting Lehman over its handling of derivatives contracts, including Deutsche. JPMorgan is battling Lehman over $US6 billion in separate claims.


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