The first distribution of funds to unsecured general creditors of failed investment bank Lehman Brothers will release $4.6 billion, starting “on or about September 10,” a development commended by the Securities Investor Protection Corporation (SIPC) in a statement.
The first round represents 17 percent of the total claims still held by general unsecured creditors, according to the SIPC statement. When the $4.6 billion is distributed, it will bring the total amount of funds distributed from the Lehman Brothers estate to customers and creditors to $110 billion.
“When the [Lehman] liquidation commenced in September 2008, the possibility of the full satisfaction of customer claims was something SIPC and the [Lehman] Trustee [James W. Giddens] hoped for, but was genuinely uncertain at that time,” says SIPC President Stephen Harbeck, in a written statement. “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 SIPC is a non-profit organization established by the Securities Investor Protection Act (SIPA) of 1970. Membership in SIPC is mandatory under SIPA, and the organization is designed as an insurance program to protect the customers of brokers and dealers registered with SIPC.
The distributions from the investment bank’s estate are “the largest return of property in history to former customers of a broker-dealer following a bankruptcy,” according to the SIPC statement.
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