Lehman Brothers Holdings Inc bondholders filed a rival plan to parcel out the bank's estimated $58 billion in assets in the largest U.S. bankruptcy reorganization on record.

Hedge fund Paulson & Co, the California Public Employees' Retirement System (Calpers) and other bondholders that filed the plan on Wednesday said the reorganization proposal offered by Lehman in March favored large banks over other creditors.

The bondholder plan, filed with a U.S. bankruptcy court in Manhattan, would combine the claims and assets of Lehman's various units and pay creditors from a single pool. Lehman's plan would treat each entity separately, allotting payouts to creditors from the entity that owed them money.

We believe Lehman Brothers Holdings Inc bondholders are treated unfairly under the debtor's plan -- which largely benefits large banks engaged in risky derivatives business, and foreign administrators -- and we want a fair outcome for all stakeholders, Calpers, the largest U.S. pension fund, said in a statement.

Paulson & Co, a hedge fund led by billionaire John Paulson, is the largest bondholder in the group. The group said Lehman owes it $9.5 billion and other Lehman entities owe it $3 billion.

A spokesman for Paulson & Co declined comment.

LEHMAN TO FILE REVISED PLAN

Bryan Marsal, a restructuring specialist and Lehman's chief executive, said in September he hoped to file a revised plan by the end of this year and seek approval of the plan by the first quarter of 2011.

The Lehman Chapter 11 cases are highly complex and because of the interconnected nature of the Lehman enterprise, the formulation of a consensual Chapter 11 plan has been extremely difficult, Lehman said in a statement after the bondholder filing.

The debtors are optimistic that, based upon the negotiations that have occurred, a consensual plan supported by major stakeholders will be filed shortly, Lehman said.

Bondholders hope that their ideas will be incorporated into Lehman's revised plan, a person familiar with the bondholder plan said. If not, the matter would likely be put to a vote of Lehman creditors next year, the person said.

San Mateo, California, part of the bondholder group, invested about $155 million in Lehman bonds and had to lay off teachers and scrap plans for new classrooms because of losses it suffered, said John Beiers, a lawyer for the county.

When Lehman filed for bankruptcy, $155 million of taxpayer money vanished, and now Lehman is trying to burn taxpayers again by suggesting an unreasonably, irrationally low recovery, he said.

$1.2 TRILLION CLAIMS FILED

Lehman Brothers has said its plan was a compromise that tried to balance competing interests. About $1.2 trillion in claims were filed against Lehman following its collapse during the global financial crisis in September 2008.

Lehman has said it expects total allowed claims to be less than $400 billion, however.

Under Lehman's original plan, some of the largest payouts would go to creditors of Lehman Brothers Special Financing Inc, the company's derivatives unit. As of April, derivative creditors included Deutsche Bank and units of Bank of America, Goldman Sachs, Morgan Stanley and Credit Suisse, among others.

Derivatives creditors would receive about 38.8 cents on the dollar under Lehman's plan, while senior bondholders of the parent company would recover about 17.4 cents.

The competing bondholder plan would boost bondholders' payouts to 24.5 cents on the dollar, while derivatives creditors would receive 25.7 cents.

Bondholders argued that assets and claims should be consolidated because creditors lent money to Lehman as a single entity, not as separate units. They also said Lehman's plan would spur litigation because of disputes over ownership of assets.

The case is in Re: Lehman Brothers Holdings Inc., U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.

(Reporting by Dena Aubin. Additional reporting by Dan Levine. Editing by Robert MacMillan)

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