A bankruptcy judge has ruled that Lehman Brothers Holdings Inc. must pay $2.38 billion to settle a lawsuit by hedge funds related to crisis-era residential mortgage-backed securities, Bloomberg News reported March 8.
The amount is less than the $11.4 billion that some hedge funds had sought.
The trustees failed to meet a "burden of proof" to show breaches on about 72,000 loans. U.S. Bankruptcy Judge Shelley Chapman in Manhattan said Lehman's administrator failed to provide enough information, and she ultimately turned to an earlier settlement by institutional investors who had valued claims at about $2.4 billion, according to the report.
The trustees representing RMBS holders are Deutsche Bank National Trust Co., Law Debenture Trust Co. of New York, U.S. Bank National Association and Wilmington Trust Co.
