Lehman ups creditor recovery forecast to $65 billion

Reuters

By Nick Brown

NEW YORK (Reuters) - Lehman Brothers Holdings Inc is increasing to $65 billion its estimated payback for creditors, a company spokeswoman said on Thursday.

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The figure represents a $5 billion increase from the $60 billion Lehman forecast in January, spokeswoman Kimberly Macleod said.

Lehman filed the biggest bankruptcy in U.S. history in September 2008, listing $639 billion in total assets. The company and the two competing creditor groups have each proposed a plan for how to divvy up the remaining assets between creditors.

Lehman hopes to begin making distributions to its creditors during the first quarter of 2012, Macleod said.

The new figure was announced earlier on Thursday by Lehman CEO Bryan Marsal in an interview on CNBC.

Macleod did not say where the additional $5 billion would come from. Overall, payouts come from settlements with certain creditors, proceeds from lawsuits and asset sales.

Marsal told CNBC he is working to revise Lehman's plan to govern the repayment of creditors, but Macleod said any possible revision depends on the result of ongoing negotiations with creditors.

"Discussions are ongoing, as we have indicated previously," she said.

Its current plan is being challenged by two competing creditor groups: a collection of bondholders led by hedge fund Paulson & Co and a handful of banks and investor groups that includes Goldman Sachs Group Inc .

A spokesman for Paulson declined to comment on the status of negotiations, while a spokesman for Goldman could not be immediately reached on Thursday.

The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.

(Editing by Andre Grenon)

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