Judge James Peck of the U.S. Bankruptcy Court for the Southern District appeared almost relieved as he approved the latest plan by Lehman Brothers, which filed the largest Chapter 11 bankruptcy filing in U.S. history about three and a half years ago. Marked by its size, drastically different plans and legal wrangling between creditors, Peck characterized the bankruptcy proceeding as the most difficult ever seen in U.S. courts.
Lowenstein Sandler PD attorneys Bruce Nathan, Esq. told NACM the case represented “Chapter 11 at its best -- Bankruptcy is at its best not when there is litigation, but when there is resolution, and this case was very difficult.” However, he also noted that, just because the plan has been approved and stakeholders have stopped fighting, doesn’t mean the Lehman situation is coming to a neat and tidy end in 2011. He warned there are still significant amounts of assets that need to be liquidated over a three-year period, which is being drawn out to maximize value as opposed to most of the rapid-fire liquidations that occurred as well as partnerships/ventures Lehman needs to get out of and a two-year window for stakeholders to file objections to claims to what may end up as a pool of money estimated at $65 billion.
“This is the end of the beginning, but there’s really a lot more to go here,” Nathan implored. “What they’ve done is extrordinary, but there’s a lot of bull work to do to finish this case out.”
That said, there has been an active trade claims market for Lehman creditors to consider. The question now is how many creditors sold their claims, and who should consider doing so at this point. “Selling might make sense given how much longer there is to go,” said Nathan.
(Note: More on this story in this week’s eNews, which will be available at www.nacm.org late Thursday afternoon).
Brian Shappell, NACM staff writer