By Lindsay Nass
After waiting almost six years, unsecured creditors of Lehman Brothers Holdings' Inc. will finally see an initial payment of $4.62 billion next month.
Trustee, James Giddens, filed a notice August 15th regarding the distribution of owned payment to Lehman's creditors. Former employees, pension funds, banks and investment firms are among the creditors who will see money starting September 10th.
The payment denotes roughly 17% of total unsecured claims against the brokerage, according to the Wall Street Journal.
Lehman Brothers Inc. filed for Chapter 11 bankruptcy protection on September 15, 2008. The firm's filing was the largest bankruptcy in US history and is generally credited as a major turning point in the 2008 financial collapse.
Upon filing, Lehman claimed $613 billion in total debt and $639 in total assets, as well as $150 billion in outstanding bond debt according to a 2008 article on MarketWatch. The firm listed over 10,000 creditors in the filing.
The upcoming September payment has been postponed until the brokerage's customers were fully reimbursed: $105 billion to 111,000 former customers, according to Reuters. The 1970 Securities Investor Protection Act put into law that customer claims are to be fully repaid before creditors.
"That such a distribution is even possible represents an extraordinary achievement that was far from certain when the liquidation began," Giddens said in a news release Friday.
Additional payments are likely in the future, Giddens stated. After the initial payment to creditors, Lehman will have paid over $110 billion; $20.4 billion in claims have been processed against the brokerage and $6.8 billion in claims are still unsettled, according to the Wall Street Journal.
On August 5th, Barclays Plc. was allowed to keep about $6 million of disputed assets after its speedy purchase of the bulk of Lehman -- money Giddens was attempting to recover.
Lehman was Wall Street's fourth largest investment bank before the 2008 Chapter 11 filing.