The Pension Benefit Guaranty Corporation (PBGC) and Lehman Brothers Holdings Inc., which filed the biggest bankruptcy in U.S. history, have agreed to settle claims over the investment bank’s underfunded retirement plan for $127.6 million, according to Bloomberg.
“Such amount represents a substantial discount from the total amount of $212.7 million potentially owed” to the PBGC, Lehman said in a filing in U.S. Bankruptcy Court in New York, according to the report.
Lehman’s retirement plan, with about 22,000 participants, had $1.2 billion in assets and about $1.04 billion in total benefit liabilities on January 1, 2008, according to the filing. The value of the plan’s assets have declined “significantly” since September 15, the day Lehman filed for court protection, according to the filing.
The PBGC sued in December to terminate the plan after finding that the plan wouldn’t be able to pay benefits when due and that the possible loss to the PBGC would “increase unreasonably” if it wasn’t ended, Lehman said (see PBGC Goes to Court to End Lehman Brothers Pension ).
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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