NEW YORK -- Lehman Brothers can begin resolving billions of dollars worth of derivatives contracts, after U.S. Bankruptcy Judge James Peck said Tuesday he would approve procedures to streamline the process.

About 900,000 derivatives contracts have been terminated since Lehman Brothers filed for bankruptcy protection on Sept. 15. But the bank is still a party to about 30,000 derivatives contracts -- valued in the billions of dollars -- that have thousands of counterparties, said Robert Lemons, a Lehman attorney, during a hearing in New York on Tuesday.

By streamlining the procedures to resolve the contracts, Lehman would not be required to bring each resolution before the court for approval.

Lehman received 101 objections to its motion to approve the procedures, but was able to resolve 65 of those objections as of Monday night, Lemons said.

Peck approved that the remaining objections be heard at a hearing on Jan. 14, if not resolved earlier.

Lehman has hired hundreds of employees dedicated to untangling and valuing the derivatives contracts.

In court on Tuesday, Peck also approved a formal request to officially hire Alvarez & Marsal as bankruptcy advisers, and to hire Lazard Freres & Co. as investment banker. Peck approved a request by the U.S. Trustee that payment of any fees to Lazard must first receive court approval.

Lehman also got permission to hire Bortstein Legal LLC and McKenna Long & Aldridge LLP as special counsel. Peck also approved the hire of Natixis Capital Markets Inc. as strategic adviser.

The bankruptcy of the storied Wall Street firm was the biggest in U.S. history; Lehman had assets of $639 billion and debt of $613 billion.

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