UPDATE3-Ambac drops Lehman claims; shares hit 9-wk high
* Ambac shares jump more than 35 pct
* Lehman drops counter-claims against Ambac
* Deal supported by unsecured creditors
* Bankruptcy court yet to approve settlement
(Adds share movement)
By Santosh Nadgir
BANGALORE, Oct 6 (BestGrowthStock) – Lehman Brothers Holdings Inc
(LEHMQ.PK: ) said troubled bond insurer Ambac Assurance Corp
would withdraw claims worth more than $6.1 billion against the
company in a deal that helped push up Ambac shares by more than
a third.
Though not officially settled, Lehman has made progress in
more than halving the amount of claims from third parties,
affiliates and others to $464 billion from almost $1.2 trillion
in the wake of its record Chapter 11 filing two years ago.
Ambac shares jumped more than 35 percent to 80 cents on the
New York Stock Exchange on Wednesday. The stock had lost more
than 26 percent since March 25, when toxic assets worth $64
billion were seized by Wisconsin state regulators.
The settlement has the support of Lehman’s unsecured
creditors, but still needs to be approved by the bankruptcy
court, papers filed late on Tuesday showed.
The deal avoids a protracted legal battle between the two
parties as Lehman also released Ambac of claims for payments
owed to it.
As part of the settlement, the two parties have agreed to
release each other from any liability under certain disputed
derivatives transactions.
“This global settlement is the result of approximately
three months of arm’s length, good faith negotiations,” Lehman
said.
Ambac Assurance’s parent, Ambac Financial Group Inc
(ABK.N: ), had warned in March it may have to file for bankruptcy
if it did not restructure its liabilities by mid-2011.
[ID:nN25237354]
Last month, Lehman said it was working to slash claims on
the estate and that its differences with creditors were
narrowing.
British bank Barclays Plc (BARC.L: ) bought Lehman’s main
U.S. brokerage business after the bankruptcy filing, and
Lehman’s other assets are being managed and unwound while
operating under bankruptcy protection.
The case is In re: Lehman Brothers Holdings Inc, U.S.
Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Santosh Nadgir in Bangalore; Editing by Prem
Udayabhanu)
UPDATE3-Ambac drops Lehman claims; shares hit 9-wk high
Category: Business News
