James W. Giddens, Trustee for the liquidation of Lehman Brothers Inc. (LBI) under the Securities Investor Protection Act (SIPA), announced that additional distributions to former securities customers began today and will continue until all securities customer claims are 100 percent fulfilled. When this additional distribution is complete, distributions from the LBI estate will stand as the largest return of property in history to former customers of a broker-dealer following a bankruptcy and liquidation proceeding.
The distributions are made possible by settlements negotiated by the Trustee with Lehman Brothers Holdings Inc. (LBHI) and Lehman Brothers International (Europe) (LBIE), which are now effective.
“The system to protect customer property worked, and that is good news for the former Lehman customers caught up in the bankruptcy who will now get all their property back,” Giddens said. ”We have overcome enormous complexities and unprecedented legal challenges to meet the goal of 100 percent distribution to customers. We are grateful to the Securities Investor Protection Corporation and the Securities and Exchange Commission for their assistance, and to Judge James Peck for his continued oversight. As we finish additional customer distributions, we remain focused on maximizing assets for the general estate and clearing the way for distributions to general creditors.”
In the weeks immediately after Lehman’s bankruptcy, 110,000 retail customers were made whole with more than $92 billion in distributions. When current distributions to affiliate, institutional, hedge fund and other customers are completed, more than $100 billion will have been distributed to LBI customers.
The success of the Trustee in marshaling assets will also pave the way for future distributions from the general estate to general creditors, including former employees, pension funds, institutions, banks, and Lehman affiliates. The process of analyzing, objecting to, settling, and otherwise resolving the more than 12,000 filed general creditor claims is well advanced.