On Wednesday, a bankruptcy judge approved a $767 million payout from Lehman to settle Freddie Mac’s claims over two loans the mortgage giant made to Lehman before the investment bank’s 2008 collapse….
The deal, approved by Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan, is structured similarly in some ways to a recently approved settlement between Lehman and Fannie Mae, which will receive about $540 million for its claim based on the latest calculations. Freddie and Fannie will hand over loan information that will allow Lehman to pursue claims against mortgage originators for alleged misrepresentations. Lehman’s lawyers said those claims can be substantial.
The previous judge in Lehman’s bankruptcy case, James Peck, had ordered Lehman to set aside $5 billion for the Fannie and Freddie claims when he approved a liquidation plan in late 2011. Because those settlements were for far less than what was set aside, other creditors should get more back.