NEW YORK - (Mealey's) Lehman Brothers Holding Co. Inc. on Feb. 28 agreed to a $1 billion settlement that resolves $2.3 billion in claims brought by the closed bank's affiliates based in Bermuda, according to a brief the bank filed in a New York bankruptcy court (In re: Lehman Brothers Holding Inc. et al., No. 08-13555, Chapter 11, S.D. Bkcy.).
(Motion for approval of settlement. Document #88-120326-212M.)
In the motion for approval of the settlement filed in the bank's Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of New York, Lehman Brothers said the settlement resolves all claims between the bank's U.S.-based affiliates and Lehman Re Ltd., its subsidiary Congress Life Insurance Co. and its creditor Pulsar Re Ltd. Lehman Re, Congress Life and Pulsar are Bermuda-based.
"In the Debtors' judgment, the Settlement Agreement provides for a fair and final resolution of all outstanding disputes and claims between their estates, Lehman Re, and certain of Lehman Re's largest creditors," Lehman Brothers said. "The Debtors submit that the Settlement Agreement is fair and reasonable, in the best interests of their estates, and should be approved."
The settlement agreement resolves the claims asserted by Lehman Re against Lehman Brothers arising primarily from two prepetition agreements: a master repurchase agreement dated July 9, 1999, between, among others, Lehman Commercial Paper Inc. (LCPI) and Lehman Re, in which LCPI committed to sell to Lehman Re, and later repurchase, residential and commercial mortgage and mezzanine loans; and the net worth maintenance agreement between Lehman Brothers and Lehman Re dated Oct. 26, 2007.
Under the settlement, Lehman Re will hold $490 million in allowed claims against LCPI and $415 in allowed claims against Lehman Brothers stemming from the two prepetition agreements.
Lehman Brothers filed the largest bankruptcy in U.S. history in September 2008.
Lehman Brothers is represented by Richard P. Krasnow of Weil, Gotshal & Manges in New York. Lehman Re is represented by James H.M. Sprayregen of Kirkland Ellis in Chicago.
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this is nuts!