Lehman Brothers pays off over $120 bil. in debt since collapse
August 14, 2018 (Mainichi Japan)
Lehman Brothers Holdings Inc., a U.S. investment bank that collapsed 10 years ago sparking a global financial crisis, has paid off a bigger-than-planned $124.6 billion of its debt, according to a court document and a company official.
Initially, Lehman Brothers planned to repay about $65 billion by now, but the pace of its liquidation process quickened against the backdrop of a prolonged expansion of the U.S. economy.
Lehman Brothers, which still holds billions of dollars in assets, has said it plans to continue paying off its debt under a court-approved debt repayment program.
The then fourth-largest U.S. investment bank collapsed in September 2008 with $613 billion in debt, making it the largest U.S. bankruptcy filing to date. At the time, it had around 25,000 employees worldwide.
The company announced its repayment plan in March 2012 and started to pay back its creditors the following month with an initial distribution of $22.5 billion, the largest initial distribution made by a company emerging from bankruptcy.
As of April this year, Lehman Brothers has made 15 distributions to its creditors with the next payment of $3.9 billion anticipated in late September.
The remaining team of nearly 80 at Lehman Brothers has been working to maximize the company's assets through the sales of its holdings of real estate and shares.
The company's strategy includes investing and holding certain assets like real estate until prices recover in the market so that it yields a better return, according to Jeff Fitts, who heads its real estate group.
Lehman Brothers sold two buildings in central Manhattan, New York, in 2011 for a total of more than $900 million. The following year, Lehman acquired cash and stock value of $6.5 billion through its sales of its real estate investment companies.
Separately, the company in 2010 auctioned art works including postwar and contemporary paintings through the auction giant Sotheby's. The collection included works by Japanese contemporary artists Takashi Murakami and Yoshitomo Nara.
At the time, the auction took in more than $12 million, with more than 80 percent of the collection sold. The proceeds were then used as part of the payback amount to creditors.
Lehman Brothers pays off over $120 bil. in debt since collapse - The Mainichi
