The trustee winding down Lehman Brothers Holding's brokerage says hundreds of former employees still waiting to recover more than $250 million in deferred compensation don't deserve to jump in front of other unsecured creditors in the bankruptcy-payout line, Dow Jones Daily Bankruptcy Review reported today. Lawyers for James W. Giddens, the trustee in charge of unwinding Lehman's brokerage, want to reclassify the employees' secured claims, which receive priority under bankruptcy law's payment scheme, to general unsecured status. Based on analysis by the trustee's counsel, Giddens said in court papers filed on Wednesday that the deferred compensation claims should be reclassified because the former employees don't possess a lien on any Lehman property. Thus, they aren't entitled to secured status under bankruptcy code, the trustee said.
