Lehman Brothers Holdings Inc. (LEHMQ) will amend a $957 million deal with German affiliate Lehman Brothers Bankhaus AG, a bondholders group said.
A prior agreement committed Lehman to paying a $100 million penalty if its own bankruptcy plan wasn’t confirmed by Dec. 31, the group, including Paulson & Co. and the California Public Employees’ Retirement System, said yesterday in a filing in U.S. Bankruptcy Court in New York.
The Paulson-Calpers group has proposed a rival liquidation plan for Lehman. Thus “it seemed potentially inappropriate” for Lehman to commit itself to “prosecuting a particular plan when it is entirely unclear what plan or plans or provisions thereof are in the best interests” of the debtors, the group said in the filing.
Lehman has said it aims to confirm its $61 billion payment plan by Nov. 17, after creditors vote by Oct. 14. The vote will be “contentious,” Lehman said in court papers.
Lehman has been buying discounted loans and mortgages from Bankhaus while negotiating the amount it owes the bankrupt affiliate. The $957 million deal was challenged on March 17, when Lehman’s defunct brokerage, Lehman Brothers Inc., said it had an ownership interest in the notes and might want a say if they’re sold.
Kimberly Macleod, a Lehman spokeswoman, declined to comment.
The bankruptcy case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.
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