Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan will preside over the hearing.
James W. Giddens of Hughes Hubbard & Reed LLP on Monday, July 13, filed a motion in the New York court requesting permission to make the $1.89 billion distribution to general unsecured creditors. This would be the third distribution for this class and would bring the total recovery for unsecureds to $7.8 billion, or 35%.
"This result, in the largest broker-dealer insolvency in history, could not have been anticipated in the dark days of the financial crisis when this liquidation began," the Monday motion said. "Indeed, at that time, a [100%] distribution to customers was in doubt, and even the prospect of a meaningful general unsecured distribution seemed remote. Today, [more than 111,000] customers have received [100%] distributions of over $106 billion in customer property; secured, administrative and priority claims have been paid in full; and general unsecured creditors have already received interim distributions of [27%]."
In a Monday statement, Giddens said, "The wind-down of the estate continues in earnest, and we will continue to resolve outstanding issues so that all remaining available assets can be fully distributed."
Any potential additional distribution will depend on the resolution of outstanding claims and the outcome of pending litigation, according to the statement.
Parent Lehman Brothers Holdings and certain subsidiaries filed for Chapter 11 on Sept. 15, 2008, after the collapse of a U.S. government-led effort to save it from massive mortgage securities losses. It exited on March 6, 2012, after confirming a liquidation plan on Dec. 6, 2011. LBHI will complete the liquidation over the next few years.
LBI, meanwhile, began a liquidation under the Securities Investor Protection Act on Sept. 19, 2008.
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