CREDITORS of failed US investment bank Lehman Brothers were granted approval to vote on its $65bn (£40bn) payback plan, clearing a major hurdle to ending the biggest bankruptcy in US history.
Bankruptcy judge James Peck overruled a handful of objections from corporate creditors and agreed to enter an order approving the outline of the plan and sending it to creditors for a vote on 4 November. Objections from investment funds Mason Capital and Centerbridge, among others, were dismissed.
Peck told a packed courtroom the plan’s disclosures were “abundant and adequate as to the issues in this too-big-to-fail enterprise”.
Lehman’s estate has spent years in talks with angry creditors but ultimately managed to bring powerful critics, including distressed investors and former trading partners, on side before the hearing.
Among its supporters were two creditor groups, including bondholders led by hedge fund Paulson & Co and derivatives creditors such as Goldman Sachs and Morgan Stanley, which hold a total $100bn in claims.
If creditors vote in favour, the plan will come back to court for a final approval hearing on 6 December.