Lehman Brokerage and Europe Unit Settle $38 Billion in Claims (Reuters) - The U.S. brokerage unit and a European unit of the former Lehman Brothers Holdings Inc said they settled litigation over $38 billion of asset claims, a major step toward customers and creditors recovering money. The announcement Friday by Lehman Brothers Inc and Lehman Brothers International Europe comes four years after Lehman, once Wall Street's fourth-largest investment bank, filed for bankruptcy at the height of the 2008 global financial crisis. James Giddens, the trustee liquidating the brokerage unit, said the accord was a "critical milestone" that would let customers recover 100 percent of their property much sooner than if LBIE litigated claims over more than 200,000 trades. Tony Lomas, joint administrator of LBIE, said the pact enables him to focus on distributing more than $7 billion of assets. The agreement in principle requires approval by U.S. Bankruptcy Judge James Peck in Manhattan - possibly in the first quarter of 2013 - and by the English High Court. LBIE had been the U.S. brokerage unit's largest customer claimant. The U.S. unit announced a separate accord Thursday with former Swiss-based derivatives unit Lehman Brothers Finance AG, reducing a $6 billion claim to $550 million. Under Friday's agreement, LBIE will be allowed $8 billion in claims for customer accounts, which includes $7.5 billion in securities and cash and $500 million in cash net equity. It had earlier sought $24 billion. LBIE will also get a $4 billion general property claim, plus $600 million of "post-filing income." Lehman Brothers Inc's $13.8 billion unsecured claim against the European unit will be eliminated. Litigation will be suspended through mid-December while the parties craft a final accord. The Chapter 11 filing by Lehman on September 15, 2008 is the largest in U.S. history. Lehman emerged from bankruptcy in March, and has paid out or plans to pay out $33 billion of an expected $65 billion to creditors, recovering an average of 21 cents on the dollar. The company is also being wound down. The cases are In re: Lehman Brothers Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-01420; and In re: Lehman Brothers Holdings Inc in the same court, No. Reporting by Jonathan Stempel in New York; Additional reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe and Bernadette Baum