By Nick Brown
NEW YORK, June 7 (Reuters) - The trustee liquidating LehmanBrothers' collapsed brokerage will begin a round ofdistributions on Friday that should result in institutionalcustomers getting all their money back, trustee James Giddenssaid.
A settlement announced earlier this year between thebrokerage, Lehman's defunct parent company and its Europeanaffiliate will provide for full payments for hedge funds,corporate affiliates, counterparties and other customers,Giddens said in a statement on Friday.
It was unclear how long the payouts would take. JakeSargent, a spokesman for Giddens, said the distributions wouldbe "completed as promptly as possible."
Corporate entities with customer claims against Lehman'sU.S. broker-dealer have been waiting nearly five years for theirmoney, as Giddens, the trustee tapped to administer the broker'sestate, has worked to determine exactly how much money wasavailable to pay them back.
The linchpin to quantifying the estate's assets was a dealannounced in February under which Giddens allowed Lehman'sparent company to assert a $2.3 billion customer claim againstthe brokerage, and allowed a $9 billion customer claim toLehman's European unit. Both amounts were less than originallysought by the affiliates, freeing up a bit more money for otherinstitutional customers.
The total customer payback will top $100 billion after thelatest round of distributions, Giddens said. That includes about$92 billion that was paid to retail customers shortly afterLehman's parent collapsed in 2008.
"The system to protect customer property worked, and that isgood news for the former Lehman customers caught up in thebankruptcy," Giddens said in the statement.
Lehman's parent filed the largest Chapter 11 bankruptcy inhistory on Sept. 15, 2008, with about $639 billion in assets.Its collapse helped to unleash the global financial crisis.
Giddens was appointed to unwind the broker's estate by theSecurities Investor Protection Corp (SIPC), which insures customers of securities investment vehicles that go bust.
SIPC on Friday applauded the milestone, which it cited asthe largest-ever return of property to brokerage customers.
"With the return of all customer property, no advances fromthe SIPC fund will be necessary to make securities customerswhole," SIPC said in a statement.
Leftover money in the estate will go toward repaying roughly12,000 non-customer general creditor claims. It remains unclearhow much money will be available to those customers.
Giddens is embroiled in litigation with Barclays Plc over the rights to as much as $8 billion in assetsassociated with Barclays' 2008 purchase of the Lehman brokerage.
Lehman's parent exited bankruptcy last year, moving aheadwith a liquidation plan that will repay about $65 billion to itsown creditors, amounting to 20 cents and 30 cents on the dollarfor various classes of creditors.
The brokerage liquidation is In re Lehman Brothers Inc etal, U.S. Bankruptcy Court, Southern District of New York, No.08-1420.
The bankruptcy of Lehman's parent is In re Lehman BrothersHoldings Inc, in the same court, No. 08-13555.
Barclays (BARC)
