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Tuesday, May 24, 2011

Paulson wants other creditors in Lehman Bankruptcy to reveal details

In a nice update to the recently posted video where Kyle Bass discusses his beef with Paulson in the Lehman Bankruptcy. Today it is out that Paulson & Co. is requesting that other creditors be forced to reveal their holdings and prices paid.

It will be interesting to see how this evolves. For more detail please see the recent article from Bloomberg pasted below.

From Bloomberg:

Hedge fund Paulson & Co., which last month revealed details of its purchases of Lehman Brothers Holdings Inc. bonds, is asking a court to order Goldman Sachs Group Inc. (GS) and other banks and investment funds to make the same disclosures.

Goldman Sachs and other creditors that have joined to back a plan to distribute Lehman’s assets should disclose details of their claims against the failed investment bank, including the prices they paid in some circumstances, Paulson and other creditors said in a filing today in U.S. Bankruptcy Court in Manhattan.

“To promote fundamental fairness and transparency in these cases, the group respectfully submits that any party seeking to participate in plan litigation be required to provide comprehensive disclosure regarding their economic interests,” the Paulson group said.

Creditors that have joined with Goldman Sachs to propose a liquidation plan for Lehman include Deutsche Bank AG (DBK), Morgan Stanley (MS) and Silver Point Capital LP, according to court papers. Paulson and other creditors, including the California Public Employees’ Retirement System, or Calpers, are pushing their own plan. The groups are fighting over how much different groups of creditors will recover from the remnants of Lehman.

Michael DuVally, a Goldman Sachs spokesman, didn’t immediately comment. Deutsche Bank spokeswoman Renee Calabro, Adam Weiner, a Silver Point spokesman, and Mary Claire Delaney, a spokeswoman for Morgan Stanley, declined to comment.

$19.6 Billion

Paulson, Calpers and other senior bondholders disclosed details of their Lehman holdings last month, including prices they paid and dates of purchases. The group holds a total of $19.6 billion in claims against Lehman units, according to the court filing.

The Paulson group wants U.S. Bankruptcy Judge James Peck in Manhattan to set disclosure requirements for creditors that are backing liquidation plans for Lehman and others involved in the bankruptcy. The group wants creditors to reveal all their holdings, what kind of claims they have and the prices they paid if they were acquired after Lehman filed for bankruptcy in September 2008.

The case is In re Lehman Brothers Holdings Inc. (LEHMQ), 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).


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