Lehman inches closer to deal with creditors

Lehman Brothers Holdings Inc. filed a revised bankruptcy plan on Wednesday that could allow what is left of the failed investment banking giant to repay some ê65 billion to its creditors.

In a lengthy filing with the US Bankruptcy Court in Manhattan, Lehman said it had reached an "agreement in principle" with groups of major creditors, which it did not name.
 
A source close to the matter told AFP that the agreement, which is still subject to modification, will be examined by the court during a hearing in late August, with hopes creditors will vote on the plan by the end of the year.

At stake is the distribution of ê65 billion among creditors demanding a total of ê325 billion.

According to the latest bankruptcy plan - Lehman's third version - holders of bonds of Lehman's parent company would receive 21.1 percent of the ê81 billion of debt they currently hold.

While that's less than the 21.4 percent they had hoped to recoup, it's more than the 17.4 percent seen in a previous plan.

Some creditors of the bank's derivatives business will receive 39 cents on the dollar.

Lehman's September 2008 collapse marked the largest bankruptcy in history, triggering a financial shockwave that dragged the global economy into recession.

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