Unsecured creditors of Lehman Brothers Holdings Inc's brokerage unit who have waited nearly five years to recoup their money will begin receiving an initial $4.62 billion payout next month, the trustee liquidating the unit said on Friday.
James Giddens, the trustee, said distributions would begin on Sept. 10 and cover 17 percent of the $27.2 billion of unsecured claims associated with the brokerage unit, Lehman Brothers Inc.
About $3.47 billion will go to creditors whose claims have been deemed valid, and another $1.15 billion will be set aside for claims that are still pending.
The payout follows distributions of $105 billion to 111,000 former customers, who have been paid in full, and other creditors whose claims had higher priority.
In a statement, Giddens said a payout to unsecured creditors had been "far from certain" when the brokerage liquidation began soon after Lehman went bankrupt on Sept. 15, 2008. More payments to unsecured creditors are expected, he said.
Giddens' recovery efforts suffered a setback on Aug. 5 when a federal appeals court said Barclays Plc was entitled to retain $5.9 billion of disputed assets as part of its hurried purchase of much of Lehman's brokerage unit.
Lehman was Wall Street's fourth-largest investment bank before seeking Chapter 11 protection. It reported $639 billion of assets, in what remains the largest U.S. bankruptcy.
The case is In re: Lehman Brothers Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-01420.