© Reuters Photo: An employee carries a box out of the offices of U.S. investment bank Lehman Brothers in London’s Canary Wharf district in this September 15, 2008 file photo. REUTERS/Andrew Winner/File photo
By Jonathan Stempel
NEW YORK (Reuters) – The divestment of Yellman Brothers’ brokerage unit has ended, 14 years and 13 days after its parent’s bankruptcy helped trigger the stock market crash and global financial crisis.
U.S. Bankruptcy Judge Shelley Chapman closed the Manhattan brokerage on Wednesday and issued a final payment to the trustee and law firm overseeing the investigation.
Over $115 billion has been paid out.
Lehman’s 111,000 customers received all $106 billion owed, and secured creditors received full payments.
Unsecured creditors received $9.4 billion, or about 41 cents on the dollar. Initially, they are expected to recover to 20 cents on the dollar.
The brokerage’s parent, Lehman Brothers Holdings Inc., was Wall Street’s fourth-largest investment bank before it filed for its biggest U.S. bankruptcy on Sept. 15, 2008.
His failure sparked much debate about whether or not companies should be allowed to fail.
Barclay (LON:) PLC bought most of Lehman’s US brokerage assets at the start of the financial crisis. Parent’s Chapter 11 bankruptcy plan was confirmed in 2011.
Lehman’s death taught that “the failure of a major financial institution should be avoided, but history tells us that it is inevitable,” the brokerage’s trustee, James Giddens, said in a statement.
Giddens’ law firm, Hughes Hubbard & Reed, was awarded a final settlement of $424 million for 14 years of work on the case.