There were negative developments Tuesday in the bankruptcy cases of Lehman Brothers and Washington Mutual Inc., both of which collapsed in September as the credit crisis deepened.
Lehman Brothers, whose bankruptcy filing was the biggest in U.S. history, said in a court filing that it needs another six months to put together a plan to pay creditors with funds from asset sales.
Wamu, the parent of the biggest U.S. banking institution to fail, was ordered to reveal the prices it gets for stakes in a group of venture capital funds.
Judge Mary F. Walrath of the U.S. Bankruptcy Court for Delaware in Wilmington rejected Wamu's request Tuesday to keep secret how much it gets for shares in 10 funds and three technology companies.
The best way to determine whether the prices are fair is to make them public, so parties in the case can have a chance to complain, Judge Walrath said in her ruling."I don't know how the court could possibly approve the sale without knowing what the price is."
The Seattle company filed for protection from creditors Sept. 26, the day after its banking operations were seized by regulators and sold to JPMorgan Chase & Co. for $1.9 billion.
Wamu has contributed almost $27.9 million to the funds, which invest in technology companies and start-ups that serve financial services firms.
It holds preferred stock in WaveLink Corp. and Financial Engines Inc. valued at about $10.4 million, and it owns common stock of Isilon Systems Inc., according to court records.
Lehman asked Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to push the deadline for filing a Chapter 11 plan back to July 13. The current deadline is Jan. 13.
Attorneys from Weil, Gotshal & Manges LLP representing Lehman said in court papers filed Tuesday that the extension is warranted because of the complexity of the case and the need to protect interests in and get data from 76 foreign entities involved in separate insolvency proceedings in 15 countries.
A hearing on the request is scheduled for Jan. 14.
Lehman's managers and professionals have "devoted a substantial portion of their time to recovering, stabilizing, and marshalling an unprecedented volume of information," according to the filing. So far they have "recovered more than half of the critical data that is needed to administer the Chapter 11 cases and have begun reconstructing financial records" that can be used to develop the plan.
The New York company filed for protection from creditors Sept. 15 with $613 billion of liabilities. It has sold brokerage and asset management businesses, and it has about $4 billion of cash as a result, according to court papers.
Two people familiar with the information said that according to estimates by Lehman's chief restructuring officer, Bryan Marsal, the hurried bankruptcy filing, made after federal regulators refused to prop up the company, may have cost creditors as much as $75 billion.
One of the people said a more orderly wind-down would have preserved value for creditors by allowing more time to settle about 900,000 derivative contracts that were canceled after the filing.
Robert Lemons, an attorney for Lehman, said at a court hearing this month that the contracts represent "billions of dollars" in value for creditors.
Mr. Marsal is scheduled to succeed Richard Fuld as Lehman's chief executive officer today. His New York turnaround firm, Alvarez & Marsal Holdings LLC, said last month that it would increase staffing for the Lehman wind-down to about 620 by yearend, from 260 at the time, with most of the new workers dedicated to settling derivative transactions.
A person familiar with the matter said that Lehman creditors have asserted about $200 billion of unsecured claims against the company, and that no estimate has been calculated for creditors' recoveries.