Lehman’s huge NYC tax bill - 29 June 2009

Lehman’s huge NYC tax bill

New
York City wants Lehman Brothers’ outstanding tax bill paid off now–or
at least before any other creditor gets money in the bankruptcy case.

Earlier this month, the city tax office filed a $626,999,222 claim
against Lehman’s bankruptcy estate. In the official notice, NYC says
its claim should be “allowed and paid in full as a priority claim in
advance of any distribution to creditors.”

The claim form also gives a Brooklyn, NY address for the NYC Dept. of Finance where a check can be mailed to.

Now, the city shouldn’t expect its check to arrive in the mail
anytime soon. It’s been more than 9 months since Lehman collapsed in
bankruptcy and the mega-case is nowhere nearing being completed. In
fact, big creditor claims keep coming in every day.

So far, NYC’s tax bill ranks as the third largest claim filed in the
bankruptcy. The largest claim against Lehman’s estate is a $2.1 billion
filed by its former thrift, Lehman Brothers Bank, which was the
hub-and-spoke for the former investment bank’s mortgage lending
business. Expect a lot of creditor objections to that claim ever
getting paid.

The largest claim filed by a former Lehman employee is a $233
million one from former COO Joseph Gregory. Last summer, Gregory was
pushed out by ex-Lehman CEO Dick Fuld as the firm began ebbing towards
its September collapse. Gregory’s claim represents deferred
compensation and “equity awards” outstanding at the time of the
bankruptcy filing.

Lehman’s collapse caused a lot of hurt to Gregory’s lifestyle. In December, The New York Observer reported that
the former Wall Street executive put his $32.5 billion Long Island
mansion up for rent. And that was after he sold his 610 Park Avenue
apartment for $4.4 million. Poor guy.

Meanwhile

more..http://blogs.reuters.com/commentaries/2009/06/29/lehmans-huge-nyc-tax-bill/