Paulson, Other Lehman Creditors File Rival Bankruptcy Plan

Dec 16 2010 | 1:14am ET

Six months after first crying foul over Lehman Brothers Holdings’ bankruptcy plan, 10 creditors led by Paulson & Co. have offered a roadmap of their own.

The group, which also includes hedge fund Fir Tree Partners and the California Public Employees’ Retirement System, said their plan would more equitably divvy up the $57.5 billion that the defunct investment bank has left. The deal, unsurprisingly, offers more to senior unsecured creditors, who would get 17.4 cents on the dollar under the original plan, and 24.5 cents under the new plan.

“The plan represents a fair allocation of value for all Lehman creditors,” Fir Tree’s David Salanic said.

The creditors, who among them have more than $12 billion in claims against Lehman, filed their plan yesterday in New York bankruptcy court. Lehman replied that its June plan was simply a “base for negotiations” and that it hopes “to reach consensus as to a joint Chapter 11 plan.”

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