Lehman seeks to delay lawsuits as settlements eyed

Thu Sep 16, 2010 12:58pm EDT
 
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NEW YORK (Reuters) - Lehman Brothers Holdings Inc asked a judge on Thursday to delay 50 lawsuits it has filed while it tries to reach settlements and focus on other parts of its record bankruptcy.

Many of the lawsuits were filed this week as Lehman raced to beat a two-year deadline to file cases seeking to undo so-called fraudulent transfers.

Lehman filed for Chapter 11 protection on September 15, 2008.

In a filing in federal bankruptcy court in Manhattan, Lehman said the 50 lawsuits were filed against more than 300 defendants and seek to avoid or undo more than 230 transactions.

"Temporarily staying these proceedings will allow the debtors to pursue consensual resolutions of claims," Lehman said in the filing.

U.S. Bankruptcy Judge James Peck will consider the request, which Lehman said has the support of the company's main creditors' committee.

Some of the lawsuits, including against Canadian Imperial Bank of Commerce and other banks, concern agreements where the bankruptcy caused collateral that would have gone to Lehman to be diverted. Lehman calls these diversions improper.

Lehman expects to file additional lawsuits to undo transactions where the two-year deadline does not apply.

Lehman is trying to repay creditors owed more than $600 billion. It has said unsecured creditors might have to wait years to recoup just 10.4 cents to 44.2 cents on the dollar.

The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.

(Reporting by Chelsea Emery and Jonathan Stempel; editing by Andre Grenon)