(August 31, 2011) — A Federal bankruptcy judge has approved a plan for Lehman Brothers Holdings to send its liquidation plan to creditors for a vote.

The approval by Judge James Peck of the federal bankruptcy court in Manhattan is a major step toward liquidating the failed investment bank, ending its bankruptcy and paying off creditors as soon as early next year, about three years after its Chapter 11 filing.

Lehman CEO Bryan Marsal has said he plans to raise as much as $65 billion to pay claims, Bloomberg reported. Total claims will come to about $360 billion, Harvey Miller, Lehman’s bankruptcy attorney, said at Tuesday’s hearing.

Earlier this month, court documents showed that Lehman executives, including former Chairman Richard Fuld, are seeking the release of $90 million in insurance funds to settle a potential multibillion-dollar lawsuit brought by shareholders. According to a filing in US Bankruptcy Court in Manhattan, investors blamed Lehman officers and directors for losses on Lehman stock and options from June 12, 2007, to September 15, 2008, Bloomberg has reported. The pending settlement would end a class-action suit that began in June 2008.

Additionally, the Securities and Exchange Commission (SEC) and the Justice Department are currently looking into the bank’s disclosures and its use of Repo 105 transactions – repurchase agreements that allowed short-term loans to appear as sales.

According to the court filing, while the insurance companies have agreed to the terms of the settlement, it will also need to be approved by a US District Court judge overseeing the class-action litigation. Among the plaintiffs that will receive money, according to the Financial Times, are the Alameda County Employees’ Retirement Association, the Government of Guam Retirement Fund and the City of Edinburgh Council as administering authority of the Lothian Pension Fund.