Court approves Lehman settlement with Freddie Mac

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Associated Press

Posted on February 19, 2014 at 12:02 PM

Updated Wednesday, Feb 19 at 1:02 PM

A U.S. Bankruptcy Court judge has approved Lehman Brothers Holdings Inc.'s $767 million settlement with Freddie Mac — an agreement that releases hundreds of millions of dollars to return to the failed investment bank's creditors.

Freddie Mac was seeking a claim over $1.2 billion in loans that it made to Lehman before its collapse.

Lehman's bankruptcy in 2008 was the biggest in U.S. history and helped set off the financial crisis.

As part of the agreement announced Wednesday, Freddie Mac will hand over loan information that allows Lehman to pursue claims against mortgage originators for alleged misrepresentation. The deal is similar to one struck recently between Lehman and another mortgage finance giant, Fannie Mae.

Representatives for both sides could not be reached for comment.

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