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BW Businessworld

Lehman Puts Derivatives Claims At $10 Bn

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Lehman Brothers Holdings Inc said on Wednesday, in bankruptcy documents available on its website, that there can be no assurance that the estimated amounts of derivatives claims are correct and the actual amounts may differ.

"This is a major step forward in resolving this important group of derivatives claims," said Daniel Ehrmann, managing director at Alvarez & Marsal and LBHI's head of international operations and co-head of derivatives.

"We are hopeful that counterparties who have provided input to the framework will settle and look forward to announcing such progress soon," Ehrmann said.

Lehman, which filed for the largest bankruptcy in US history in September 2008, can settle with its creditors only after the court has approved a bankruptcy exit plan for which the preliminary hearing is in June.

Different groups have been jostling to see who will be able to recoup money they lost when Lehman filed for Chapter 11 protection, reporting $639 billion of assets, six times more than any other US company to go bankrupt.

The company proposed a roughly $60 billion payback plan that would allow the Paulson bondholder group to recover 21.4 per cent of its roughly $20 billion in claims.

The bondholder group, led by hedge fund Paulson & Co, however, has proposed that derivatives creditors should receive 25.7 per cent recovery and the bondholders 24.5 per cent.

Paulson group believed Lehman's original plan favored large banks including Goldman Sachs Group Inc and Morgan Stanley, who were creditors of Lehman's derivatives business.