Lehman to pay Freddie Mac $767 million

by Ryan Smith14 Feb 2014
The holding company in charge of winding down the assets of the once mighty Lehman Brothers is unlimbering its checkbook again. Lehman Brothers Holdings Inc. has settled a $1.2bn claim with Freddie Mac.

Under the settlement, Lehman will pay Freddie $767 million to settle the claim, according to a Reuters report. The original claim stems from two loans Freddie made to Lehman in the months before the financial crisis. Lehman was scheduled to pay the loan back on Sept. 15, 2008 – the day it filed for bankruptcy.

Last month, the company reached a settlement resolving Fannie Mae’s $18.9bn claim over mortgage loans and mortgage-backed securities sold to Fannie prior to the financial meltdown. Under the terms of the settlement, Fannie would recover about 25 cents on the dollar, or around $537.5 million.

Lehman emerged from bankruptcy in 2012. The holding company in charge of winding down its assets could eventually return up to $65bn to creditors, Reuters reported. However, that process could take several years. The company’s failure marked the largest bankruptcy in U.S. history, and played a major role in kickstarting the global financial meltdown.



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