|By PR Newswire||
|August 15, 2014 08:06 AM EDT||
WASHINGTON, Aug. 15, 2014 /PRNewswire-USNewswire/ -- The first interim distribution to unsecured general creditors of Lehman Brothers Inc. (LBI) will make available $4.6 billion, according to James W. Giddens, trustee for the liquidation of LBI. The Securities Investor Protection Corporation (SIPC) today commended the hard work of Trustee Giddens and his attorneys in reaching this major milestone. Distributions are set to commence on or about September 10.
A SIPA liquidation addresses claims of general creditors as well as the 'customers' SIPC and the Trustee are charged with protecting.
SIPC President Stephen Harbeck said: "When the SIPA liquidation commenced in September 2008, the possibility of the full satisfaction of customer claims was something SIPC and the Trustee hoped for, but was genuinely uncertain at that time. The fact that customer claims have been fully satisfied, and that unsecured general creditors are now receiving a significant distribution, is an extraordinary achievement. The remarkable distribution of billions of dollars to general creditors is attributable to the diligence and many hundreds of hours of hard work of Trustee Giddens, his counsel, and his staff. SIPC applauds this historic achievement. We also thank U.S. Bankruptcy Court Judges James Peck and Shelley C. Chapman for their countless hours of work, in reaching this important milestone."
The $4.6 billion allocated for this first distribution to unsecured general creditors represents 17 percent of the total amount of these claims. With this planned first interim distribution, more than $110 billion will have been distributed from the LBI estate to customers and general creditors.
SIPC and Trustee Giddens had previously announced in June 2013 that 100 percent of LBI securities customers claims would be fulfilled. With that return of all LBI customer property, no advances from the SIPC Fund were necessary to make LBI securities customers whole. Secured and priority general creditor claims have also been fully satisfied. SIPC and the Trustee also noted that distributions from the LBI estate stand as the largest return of property in history to former customers of a broker-dealer following a bankruptcy and liquidation proceeding.
Full details on the distributions can be found at http://www.lehmantrustee.com.
The Securities Investor Protection Corporation (http://www.sipc.org) is the U.S. investor's first line of defense in the event of the failure of a brokerage firm owing customers cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.
The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities - such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims for customer cash and/or securities held in custody with the broker for up to a maximum of $500,000 per customer. This figure includes a maximum of $250,000 on claims for cash. From the time Congress created it in 1970 through December 2013, SIPC has advanced $ 2.1 billion in order to make possible the recovery of $133 billion in assets for an estimated 772,000 investors.
MEDIA CONTACT: Ailis Aaron Wolf, (703) 276-3265 or [email protected].
All non-media/investor inquiries of SIPC should be directed to [email protected] or (202) 371-8300.
SOURCE Securities Investor Protection Corporation, Washington, D.C.
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