* Claims resolved between Lehman parent, brokerage, Euro arm
* Deals resolve $44 bln in customer claims
* Trustee sees full payouts now to former customers
By Nick Brown
NEW YORK, Feb 26 (Reuters) - Lehman Brothers' U.S.brokerage on Tuesday finalized settlements with the formerfinancial giant's parent and European entities, resolving nearly$44 billion in customer claims and paving the way for fullrepayment to the brokerage's former customers.
Though deals were initially announced last year, detailswere ironed out and revealed in court papers and statements bythe parties on Tuesday. Lehman's parent will be allowed a $2.3billion customer claim against the brokerage, down from the$19.9 billion it had initially sought, papers show.
Lehman's European unit will receive a $9 billion customerclaim, reduced from the $24 billion originally asserted.
The parent will also receive $14 billion in lower-priorityunsecured claims against the brokerage, while the European armwill get a $4 billion unsecured claim.
Lehman and several affiliates filed the largest-ever U.S.bankruptcy on Sept. 15, 2008, with $639 billion in assets.
The intercompany claims had been the final key disputeskeeping the trustee who is liquidating Lehman's brokerage, JamesGiddens, from making full payouts to customers.
The settlements should allow for full payout, Giddens saidin a statement on Tuesday. Leftover money would be paid to otherclasses of unsecured creditors, though it remains unclear howmuch they could receive.
Giddens called the four-year negotiations "arduous."
"We are delighted that these agreements have been reached,"he said in the statement.
The deals are subject to approval by U.S. Bankruptcy Courtin Manhattan; a hearing is set for April 16. The European unit'ssettlement needs approval by an English court.
Daniel Ehrmann, co-head of derivatives for the Lehmanparent, said the deal "avoids costly and extensive litigation,and contributes significantly to recoveries for" the parent'screditors.
Lehman is in the midst of repaying about $65 billion tocreditors of its parent and other subsidiaries under aliquidation plan approved in late 2011.
Tony Lomas, one of the administrators liquidating Lehman'sEuropean unit, called that unit's settlement a "definingtransaction" that resolves "the most complex inter-affiliate"dispute in Lehman's insolvency.
The U.S. brokerage will keep $777 million in reserve as itcontinues to litigate legal claims from Barclays overthat company's purchase of the brokerage's assets in 2008,according to court papers.
The bankruptcy is In re Lehman Brothers Holdings Inc, U.S.Bankruptcy Court, Southern District of New York, No. 08-13555.
The brokerage liquidation is In re Lehman Brothers Inc, inthe same court, No. 08-1420.
Barclays (BARC)
