Australian Unit Apparently To Blame For Lehman Brothers Bankruptcy

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Creditors of the former investment bank in the U.S. and Europe will get everything back. Creditors in Australia are not so lucky.

Tony Lomas, who is overseeing Lehman's U.K. administration, a process similar to Chapter 11 in the U.S., said a number of settlements with other Lehman affiliates in the past six months helped clear the way for an initial £1.8 billion ($2.76 billion) payment to unsecured creditors last November, and that a strengthened financial position "now suggests that…there would be sufficient funds to settle in full all provable claims," excluding those by shareholders and claims for interest….

Liquidators of Lehman Brothers' Australian unit Friday sought court approval for a plan that, if approved, would pay back unsecured creditors less than half of what they are owed. The proposed plan would pay creditors between 39.9 cents and 49.2 cents on the dollar, according to IMF (Australia), a Sydney-based firm that has been funding litigation against Lehman….

Some 110,000 individual retail customers of Lehman's U.S. broker-dealer have also received all their money back, $92.3 billion in all. That unit is being wound down by James Giddens in accordance with the Securities Investor Protection Act. Mr. Giddens and his U.K. counterparts settled their $38 billion dispute last fall.

Creditors of Lehman's U.K. Arm May Be Fully Repaid [WSJ]
Creditors of Lehman's European Unit Could Be Completely Repaid [DealBook]

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Everybody Give It Up For Lehman Brothers!

"We are proud to announce Lehman's exit from chapter 11 and entrance into the final stage of this process -- distributions to creditors. Our objective remains to provide the best results possible for creditors -- by continuing to strategically position assets to produce strong values, to pursue the resolution of disputed claims and other matters in litigation, and to manage expenses in line with the asset disposition process," said John Suckow, who is managing director with bankruptcy adviser Alvarez & Marsal and Lehman's president and COO. Suckow also thanked Lehman employees for working "diligently" since the bank's collapse in September 2008 to reach the milestone. [NYP]