Lehman bondholders may be owed $73 bln-claim
Mon Sep 14, 2009
NEW YORK, Sept 14 (Reuters) – The trustee of holders of bankrupt Lehman Brothers’ (LEHMQ.PK) senior bonds said that the debt holders may be owed as much as $73 billion, after losing their investments when the bank filed for bankruptcy protection a year ago, according to court documents.
Wilmington Trust Company claims that holders of the senior debt of the failed bank are estimated to be owed between $49 billion and $73 billion.
In addition, noteholders may seek payments on unpaid interest and costs and damages associated with Lehman’s failure to repay the debt.
Lehman’s estate is facing a slew of claims from creditors including bondholders, derivatives counterparties, states, towns and individuals ahead of a September 22 deadline.
Administrators of the London arm of Lehman Brothers said last month the claims it is handling against the collapsed Wall Street bank could total as much as $100 billion. For details, see [ID:nLU656693]
Unsecured creditors to the failed bank are expected to recover only a small portion of the money owed, due to the large number of claimants, low value of many of Lehman’s assets and the complexity in unwinding the bank’s operations, analysts said.
“The accounts were way overstated, the value of assets on Lehman’s books were far greater than most people expect,” said Sean Egan, managing director for Egan-Jones Ratings Co in Haverford, Pennsylvania.
Unsecured Lehman claims are trading at around 20 cents on the dollar, said participants in the market.
“It depends on how quickly you have to get your money back, if you can wait and can take advantage of some of the upswings in some of the values then north of 20 is probably reasonable,” said Egan.
However, “if you had to sell 6 months ago or 5 months ago then you’re lucky to get 10 cents on the dollar,” he added.
(Reporting by Karen Brettell; Editing by Diane Craft)
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