Lehman inches closer to deal with creditors

Lehman Brothers Holdings Inc. has filed a revised bankruptcy plan that could allow what is left of the failed investment banking giant to repay some $65 billion to its creditors. In a lengthy filing with the US Bankruptcy Court in Manhattan, Lehman said it had reached an "agreement in principle" with groups of major creditors, which it did not name. A source close to the matter told AFP that the agreement, which is still subject to modification, will be examined by the court during a hearing in late August, with hopes creditors will vote on the plan by the end of the year. At stake is the distribution of $65 billion among creditors demanding a total of $325 billion. According to the latest bankruptcy plan -- Lehman's third version -- holders of bonds of Lehman's parent company would receive 21.1 percent of the $81 billion of debt they currently hold. While that's less than the 21.4 percent they had hoped to recoup, it's more than the 17.4 percent seen in a previous plan. Some creditors of the bank's derivatives business will receive 39 cents on the dollar. Lehman's September 2008 collapse marked the largest bankruptcy in history, triggering a financial shockwave that dragged the global economy into recession.