New York: Goldman Sachs Group, seeking to get more money from bankrupt Lehman Brothers Holdings, may propose a liquidation plan for the defunct company that would compete with two rival plans, two creditors said.
Goldman Sachs, which owns claims against a Lehman's derivatives unit, is considering proposing its own plan to pay creditors, said John Beiers, chief deputy county counsel for San Mateo County in California, and another creditor familiar with the matter.
The county has joined hedge fund Paulson and Co and other bondholders to push a plan that would pay them more than one filed by Lehman.
"This really gets under my skin because it is yet another example of big banks taking a position that adversely impacts taxpayers and Main Street," Beiers said yesterday, referring to the potential plan from Goldman Sachs. San Mateo County is owed $155 million (Dh570 million) by Lehman.
Rival claim
Goldman Sachs, based in New York, has been buying claims of another Lehman unit and met with Lehman recently to outline its proposal, according to the other creditor, who declined to be named because the discussions were private. Lehman opposes Goldman Sachs' challenge, the person said.
Michael DuVally, a spokesman at Goldman Sachs, declined to comment. Bryan Marsal, Lehman's chief executive officer, didn't immediately respond to an email seeking comment.
Derivatives creditors were in line to get 38.3 cents on the dollar as Lehman liquidated, according to calculations by Paulson and other bondholders. The bondholders' rival plan would cut that to 25.7 cents and raise the bondholders' share to 24.5 cents.
In the next few years, Marsal aims to raise $61 billion from Lehman's assets to pay $322 billion in claims, or an average of 18.6 cents on the dollar for each creditor, he said in January.
Responding to Paulson's challenge, Marsal said he would pay bondholders a little more than originally offered, taking something away from derivatives creditors.
Derivatives
Morgan Stanley, Credit Suisse Group AG, Deutsche Bank AG and Bank of America Corp. have filed derivatives claims against the Lehman Brothers Special Finance unit, according to court filings.
Lehman hopes to win court approval of its payment plan by the end of the year and is negotiating with creditors on details. wApproval of the plan will be a "contentious", given the competing proposal by Paulson and other creditors, Lehman said in a court filing last week.
The Paulson group, which includes the California Public Employees' Retirement System, or Calpers, says its plan is better for Lehman creditors.
Goldman Sachs' proposal would lead to a lower recovery for San Mateo County and other creditors of Lehman's holding company, Beiers said.
"Now a large bank like Goldman Sachs, which has all the resources," is looking to "rob us", he said.
