New York (Reuters) Lehman Brothers Holdings, General Growth Properties and Smurfit Stone Container Corporation led bankruptcy claims trading activity in February, according to data released on Tuesday from SecondMarket.
SecondMarket, which runs a trading platform for bankruptcy claims and other illiquid assets, said some 108 claims worth $620 million (Dh2.2 billion) changed hands in February in the Lehman bankruptcy, while 10 claims worth $40 million did so in the General Growth case, and 604 claims worth $11.7 million were swapped in the Smurfit Stone bankruptcy.
A total of 1,417 claims were transferred in February with a face value of some $723.8 million, Sec-ondMarket said, marking an all-time record in claims trading activity for a single month.
Activity spike
The previous one-month high was in December when 1,029 claims were traded. December also holds the record face-value traded with some $3.3 billion in claims trading hands amid a year-end activity spike.
Bankruptcy-claims trading lets creditors with claims against bankrupt companies sell their interests to investors before the conclusion of a bankruptcy case.
Smurfit-Stone represented 42 per cent of all transfers in February, as the packaging company's shareholders have been fighting in court to get a payout from its bankruptcy.
"Smurfit's been quite active," said Christopher Moon, director of bankruptcy claims trading for SecondMarket.
"We've been involved in a number of transactions and we've seen pricing levels generally pick up as well for general unsecured claims over the last six months."
Lehman has been getting increased attention ahead of the bankrupt investment bank's filing of a reorganisation plan later this month, and General Growth claims have seen "renewed interest" from potential sellers of claims as investors from Simon Property Group and Brookfield Asset Management compete to take the mall owner out of bankruptcy, Moon said.
Typically bankruptcy claims do not start trading regularly until several months after a bankruptcy filing.
A few small claims totalling less than $15,000 also traded in the old General Motors case last month, marking the first time that claims have been traded in the case since its June bankruptcy filing.
While GM sold its best assets to a new company, Motors Liquidation Company was still liquidating what remains of the old company.
- $3.3b value of claims traded in December 2009
- $620m Lehman's bankruptcy claims in February
- $40m General Growth's claims in February
