WASHINGTON, July 13, 2015 /PRNewswire/ -- The Securities Investor Protection Corporation (SIPC) praised the latest achievement of Lehman Brothers Inc. Trustee James W. Giddens, who today filed a motion with the United States Bankruptcy Court seeking approval to make a third interim distribution totaling $1.89 billion to unsecured general creditors with allowed claims.
If the Court approves the third interim distribution, the cumulative payout to unsecured general creditors will reach 35 percent and total approximately $7.8 billion. Total distributions to all creditors, which include unsecured general creditors and secured, priority, and administrative creditors, will come to more than $8 billion.
SIPC President Stephen Harbeck said: "The results achieved to date have exceeded expectations. The professionals from Hughes Hubbard & Reed demonstrated that the Securities Investor Protection Act was suited for dealing with the most complex insolvency in history."
In total, customers have received more than $106 billion, fully satisfying the 111,000 customer claims. Secured, priority, and administrative creditors have also received 100 percent distributions.
The Securities Investor Protection Corporation (http://www.sipc.org) is the U.S. investor's first line of defense in the event of the failure of a brokerage firm owing customers cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.
The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities -- such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims for customer cash and/or securities held in custody with the broker for up to a maximum of $500,000 per customer. This figure includes a maximum of $250,000 on claims for cash. From the time Congress created it in 1970 through December 2014, SIPC has advanced $ 2.3 billion in order to make possible the recovery of $134 billion in assets for an estimated 773,000 investors.
SOURCE Securities Investor Protection Corporation (SIPC)