Lehman brokerage trustee strikes settlement with finance unit
Oct 4 (Reuters) - The trustee liquidating Lehman Brothers' U.S. brokerage has reached a settlement with its former derivatives unit that will reduce to $550 million an original claim of $6 billion, according to court documents.
The deal will enhance the ability of the trustee, James Giddens, to distribute payouts to former clients of Lehman Brothers' brokerage four years after the investment bank collapsed.
Lehman Brothers Finance AG, which was based in Switzerland, will receive a $190 million customer claim and a $360 million general unsecured claim against the brokerage, according to a document filed Wednesday in Manhattan's bankruptcy court.
Customer claims are paid before general unsecured claims.
The finance unit specialized in structuring derivatives transactions. The liquidator of the finance unit, PricewaterhouseCoopers AG, had claimed that about $6 billion in securities and cash were held in accounts at Lehman Brothers brokerage. The finance unit's claims were among the largest submitted against the brokerage, according to the court filing by Giddens.
Lehman Brothers Holding Inc and its affiliates filed for bankruptcy in September 2008 at the height of the financial crisis.
(Reporting By Tom Hals in Wilmington, Del.; Editing by Tim Dobbyn)
Keywords: LEHMANBROTHERS BANKRUPTCY/SETTLEMENT