Bloomberg News

Lehman Brokerage Trustee Seeks $24.3 Million for Four Months

January 04, 2012

(Updates with fee total in second paragraph.)

Jan. 4 (Bloomberg) -- The trustee liquidating the Lehman Brothers Inc. brokerage is seeking $24.3 million in fees for himself and his law firm for the four months through June, plus expenses of about $299,916.

James Giddens, who also is liquidating the MF Global Inc. broker-dealer, asked a judge to approve the fees for Lehman work yesterday in his eighth request in the three years since the Lehman parent filed the biggest bankruptcy in U.S. history. Prior fees and expenses approved for the trustee and his firm, Hughes Hubbard & Reed LLP, total $145.6 million, according to a filing yesterday in U.S. Bankruptcy Court in Manhattan.

Giddens worked 468 hours at $891 an hour for $417,255 in fees during the four-month period, out of more than 51,000 hours billed by the firm, according to the filing.

Giddens plans to start paying the Lehman brokerage’s remaining customers, mostly hedge funds and institutions, early next year from available assets of $18.3 billion, he said last month. He didn’t say how much money customers can expect, only that his goal was to make “a significant” payment. Large payouts must await the resolution of remaining disputes over claims filed against the defunct brokerage, he said.

By law, Giddens must share the assets equally among customers. He has gathered $23.7 billion to pay customers from settlements, litigation and negotiations with banks and other business partners, according to court records. He is holding $3 billion of the total in reserve for a court fight with Barclays Plc, which in 2008 bought North American businesses of the brokerage’s parent, Lehman Brothers Holdings Inc.

Legal Disputes

Billions of dollars also are at stake in Giddens’s disputes with Lehman Brothers Holdings, its London affiliate, and counterparties to mortgage contracts and repurchase transactions, according to yesterday’s filing.

The brokerage has spent $642 million on its liquidation, with most of the money going for professional and consulting fees, Giddens disclosed in October.

After the 2008 Lehman bankruptcy, 110,000 customer accounts with assets of $92.3 billion were mostly absorbed by London- based Barclays and New York-based Neuberger Berman Holdings LLC.

The Lehman brokerage liquidation is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Stephen Farr, Andrew Dunn

To contact the reporter on this story: Linda Sandler in New York at

To contact the editor responsible for this story: John Pickering at

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