Houston’s Gibbs & Bruns Negotiates $2.4 Billion Lehman Bankruptcy Agreement

© 2017 The Texas Lawbook.By Allen Pusey (April 5) — In a small but important step toward ending its long-running bankruptcy, the estate of Lehman Brothers has agreed to repay $2.416 billion in claims for substandard mortgages—loans that formed the basis for residential mortgage backed securities (or RMBSs) sold to 244 trusts. The deal was negotiated by the Houston-based law firm Gibbs & Bruns on behalf of 14 major investor clients — including Metropolitan Life, BlackRock, Goldman Sachs, Voya and the Federal Home Loan Bank of Atlanta — who helped mediate the agreement with Lehman for the benefit of the various trusts. Robert Madden, a partner at Gibbs & Bruns, said the settlement represents “an important capstone to our clients’ efforts to address the problems of ineligible mortgages (in RMBSs).” Partner Kathy D. Patrick and associate David Sheeren were also involved in the negotiations. It also represents the latest in a string of settlements charted by the litigation boutique between major financial institutions and investors in RMBS trusts. The firm was involved closely in a $8.5 billion settlement with Bank of America/Countrywide, a $4.2 billion settlement with JPMorgan and a $1.5 billion settlement with Citigroup. Lehman Brothers, then the nation’s…