Lehman Brothers amends bankruptcy plan

Bankrupt financial company Lehman Brothers Holdings Inc proposed a new plan for divvying up billions of dollars among its creditors after bondholders said the previous version was unfair.

The plan filed late Tuesday, key to Lehman's exit from the largest bankruptcy in US history, comes after an earlier version filed in April met strong opposition from hedge fund Paulson & Co, the California Public Employees Retirement System (Calpers) and other bondholders.

Lehman Brothers' amended plan proposed trimming payments to unsecured creditors of the derivative unit, Lehman Brother Special Financing. It also proposed increasing payments to the senior unsecured creditors of the holding company.

The ad hoc group of bondholders, which says it has about $20 billion of claims, had objected to Lehman's previous plan saying that it favored large banks who were creditors of the derivatives business over other creditors.

The case is In re: Lehman Brothers Holdings Inc, US Bankruptcy Court, Southern District of New York, No. 08-13555.