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| Edited By: |Source: Reuters |Updated: Mar 17, 2018, 05:32 AM IST
Lehman Brothers Holdings Inc said Ambac Assurance Corp agreed to withdraw claims worth more than $6.1 billion against the company as part of a global settlement.
The deal has the support of Lehman's unsecured creditors and is yet to be approved by the bankruptcy court, papers filed late on Tuesday showed.
As part of the settlement, the two parties have agreed to release each other from any liability under certain disputed derivatives transactions.
"This global settlement is the result of approximately three months of arm's length, good faith negotiations," Lehman said.
Ambac Assurance's parent, Ambac Financial Group Inc, said in March that it may have to file for bankruptcy if it does not restructure its liabilities by the second quarter of 2011.
The bond insurer, whose toxic assets worth $64 billion were seized by Wisconsin state regulators, is in dire need of capital.
Shares of Ambac have shed more than 26% since the seizure of its assets on March 25 till Tuesday's close.
In September, Lehman said it worked to slash claims on the estate and that its differences with creditors are "narrowing."
Lehman filed for Chapter 11 two years ago, in the largest-ever US bankruptcy.
British bank Barclays Plc bought Lehman's main US brokerage business after the bankruptcy filing, and Lehman's other assets are being managed and unwound while operating under bankruptcy protection.
Though not officially settled, Lehman said it has made progress in narrowing the amount of claims from third parties, affiliates and others by more than half, to $464 billion from almost $1.2 trillion.
The case is In re: Lehman Brothers Holdings Inc, US Bankruptcy Court, Southern district of New York, No 08-13555.
