Ex-Lehman Brothers Workers Lose Bid to Get More From Payment Plan

Former Lehman Brothers employees’ demands to be paid directly from a deferred compensation plan are unsecured claims for its bankruptcy estate, the Second Circuit said.

The unsigned, unpublished decision Friday from the U.S. Court of Appeals for the Second Circuit means that more than 300 former employees in the compensation plan will likely recover little to nothing in Lehman Brothers Holdings Inc.'s bankruptcy case.

The ruling affirms bankruptcy and district court orders that the workers’ claims, under the now-defunct investment bank’s Executive and Select Employees Plan (ESEP), aren’t secured. Secured claims are usually paid before unsecured creditors can recover from ...