Ex-Chairman Richard Fuld and other Lehman Brothers executives agreed to settle an investor lawsuit by dipping into  $90 million insurance payment.  Investors blamed Lehman officers and directors for losses on Lehman stock and options from 6/12/07 to 9/15/08.  A bankruptcy examiner said Lehman foundered because of too much debt, which it tried to hide from investors, and risky real estate investments.

Lehman said in November that Fuld would get $10 million from insurers as part of an officers-and-directors program paying for the costs of lawsuits.  It also said insurers would be asked to pay as much as $90 million in costs for unidentified defendants in civil, criminal and regulatory proceedings.  Lehman has asked the judge to modify bankruptcy law on 9 previous occasions to tap its directors-and-officers insurance, according to yesterday’s filing in U.S. Bankruptcy Court.  .

The bankruptcy case is:  In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).   [Bloomberg, 8/25/11]