Lehman seeks court OK to sell interest in hedge fund via settlement

By Caroline Salls

Pittsburgh, June 24 - Lehman Brothers Holdings Inc. requested court approval to redeem or sell a limited partnership interest in Silver Lake Credit Fund, LP, as well as court approval of a related settlement agreement, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Silver Lake Credit Fund is a credit-focused hedge fund that invests in liquid and illiquid securities.

Under the settlement, Silver Lake and its partner Silver Lake Financial Associates, LP have agreed that Silver Lake Financial or a third party purchaser will pay Lehman in tranches for 92.5% of a book capital account valued at $127.53 million.

As a result, Silver Lake Financial has agreed to withdraw a claim and waive any right it has to recoup amounts owed by Lehman on account of the Silver Lake Financial claims against amounts owed to Lehman on the book capital account.

Lehman said it has decided that a redemption or sale of the partnership interest under the settlement gives it the best chance to realize value from the investment in Silver Lake Credit Fund.

A hearing is scheduled for July 14.

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

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