A US 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 US history and helped set off the financial crisis.
As part of the agreement announced yesterday, Freddie Mac will hand over loan information that allows Lehman to pursue claims against mortgage originators for alleged misrepresentation. The deal is similar to the one struck recently between Lehman and another mortgage finance giant, Fannie Mae.
Representatives for both sides could not be reached for comment.