HONG KONG: Lehman Brothers said Thursday it had reached a deal to settle more than $20 billion in claims tied to its Hong Kong business after its collapse, which triggered the global financial crisis.
The agreement was hailed as "another milestone" in a complicated liquidation with creditors across the world demanding more than $300 billion from the former Wall Street titan, in one of history's biggest corporate bankruptcies.
Its collapse in September, 2008, after its risky bets on the US housing market turned bad, sent shockwaves through the world banking system.
Lehman said the deal announced Thursday would settle more than $20 billion in "inter-company claims" between it and its collapsed affiliates in Hong Kong, and may speed up the liquidation.
"This is a genuinely exciting development," said Edward Middleton, a partner at KPMG China who is involved in the Hong Kong liquidation process.
"It is a quantum leap in the progress of the Hong Kong liquidations, and I am sure it will assist our colleagues in the US as well," he added.
Last month, the bank said it struck a deal with a group of other unnamed creditors vying for $65 billion of its assets.
Hong Kong was rocked by Lehman's collapse with tens of thousands of investors losing about HK$15.7 billion ($2 billion) they ploughed into so-called minibonds and other complex products backed by failed firm.
The deal Wednesday was not related to an earlier offer by 16 banks, who sold Lehman products, to refund Hong Kong investors most of their money.
Copyright AFP (Agence France-Presse), 2011
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