The bankrupt Lehman Brothers agreed to contribute as much as $15 million of capital and assign mortgage-servicing rights to its Lehman Brothers Bank to prevent the thrift from being seized by regulators.
The contributions would come on top of a $185 million infusion of securities in February and an agreement last month to buy as much as $325 million of mortgages from the thrift.
Lehman Brothers, the fourth-largest U.S. investment bank before its bankruptcy filing in September, has said it needs to provide the funds to protect its stake in the thrift, valued at about $467 million.
Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York approved the capital contribution and rights transfer to the thrift's Aurora Loan Services LLC at a hearing Tuesday.
"We'll probably be here at least one time more," said Alfredo Perez, an attorney for the company. "The whole goal is to try to get these banks up, so they are in the well-capitalized range. I do think we've started to turn the corner here."
Peck previously approved a plan by Lehman Brothers to contribute as much as $272 million to its Woodlands Commercial Bank in Salt Lake City. That plan was meant to prevent the government from seizing and liquidating the unit, because it did not have enough assets.
The Office of Thrift Supervision had threatened similar action for Lehman Brothers Bank if certain capital levels were not met, according to court papers.
The OTS must approve the contributions, and Perez said it has typically done so after Peck's rulings.
Bryan Marsal, Lehman Brothers' chief executive, has said a government seizure of the units could reduce returns to the parent's creditors by $1.2 billion to $3.6 billion.