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Creditors say Lehman payment plan flawed

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San Mateo County and the California Public Employees’ Retirement System objected to the Lehman Bros. plan to pay claims, saying it fosters conflicts among creditors that may lead to lawsuits.

Lehman should boost some creditors’ payments and reduce others, so all are compensated equitably, a group that includes the county and CalPERS, the nation’s largest public pension fund, said in an objection filed Tuesday in U.S. Bankruptcy Court in Manhattan, N.Y. The group holds $15.5 billion in claims against the defunct firm.

“The plan establishes a ‘pot’ of assets for distribution and pits creditors of the various estates against each other,” the group said in the filing.

San Mateo County invested $155 million in Lehman debt.