Lehman eyes $1.56 million settlement of derivatives contracts

By Lisa Kerner

Charlotte, N.C., Nov. 16 - Lehman Brothers Special Financing Inc. and Lehman Brothers Financial Products Inc., as debtors and debtors-in-possession, together with Lehman Brothers Holdings Inc. and their affiliated debtors asked the court to terminate certain derivatives contracts and approve a settlement totaling about $1.56 million, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

A hearing is set for Dec. 15.

The derivatives contracts generally do not mature for many years and are "out-of-the-money" to the debtors and are incapable of becoming "in-the-money," the filing said.

It is in the best interests of the debtors' estates and creditors to fix the amount of liability arising under the 19 derivatives contracts.

The settlement amounts have been verified by an independent third-party valuation agent, Lehman said.

New York-based Lehman Brothers Holdings was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 08-13555.

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