updated 1/14/2009 4:05:47 PM ET 2009-01-14T21:05:47

A top Lehman Brothers executive said Wednesday that the company's bankruptcy case could be wrapped up within two years.

Restructuring expert Bryan Marsal, who replaced Lehman's longtime chief executive Richard Fuld at the end of 2008, told a bankruptcy judge that liquidators could finish their work of winding down Lehman within 18 to 24 months.

Lehman — once the fourth-biggest U.S. investment bank — filed the biggest bankruptcy in U.S. history on Sept. 15. Many key assets have since been sold.

Liquidators must resolve about 750 open loan trades and nearly half a million outstanding derivatives contracts, and coordinate 76 separate international insolvency proceedings linked to the main Lehman case.

Some have said the case could take up to 10 years.

Separately, U.S. Bankruptcy Judge James Peck extended Lehman's exclusive control over the case, pushing back a deadline to file a reorganization plan to July 13. His ruling holds back any creditors who might want to propose their own plan.

Peck also appointed an independent investigator in the case. The appointment was required because of the size of the case and stakeholders had asked for it.

The scope of the investigation could now include fraud, dishonesty and mismanagement, according to a revision made in court.

The Walt Disney Co. had asked for the investigator in a court motion filed in the fall, but the request was postponed as Lehman's lawyers and advisers worked to create more order in the case.

Disney has been joined by Bank of America, a group of Harbinger hedge funds, New York state Comptroller Thomas DiNapoli, and plaintiffs in class action lawsuit against Lehman.

Lehman also faces other investigations run by U.S. attorneys in the Southern District of New York, the Eastern District of New York and the District of New Jersey, as well as the Securities and Exchange Commission.

A lawyer from the Southern District of New York's prosecutor's office asked the court to change the proposed order for an examiner to prevent interference with pending criminal investigations.

Marsal, the CEO, offered some financial details that demonstrate the progress of Lehman's case. He said the failed investment bank now has about $6 billion in cash reserves, up from the $3.3 billion it had when it filed.

Since the filing, Lehman has sold key U.S. assets to Britain's Barclays Capital for $1.35 billion and its Asian, European and Middle Eastern businesses to Japan's largest brokerage, Nomura Holdings Inc., for $2 billion.

Total headcount has fallen to 509, excluding its Neuberger Berman money management unit, from more than 25,000 before the bankruptcy filing. Neuberger Berman is slated to be sold to a group of its managers and employees. That deal netted Lehman $922 million and 49 percent of Neuberger's common stock.

Another $2 billion has been collected from the settling of derivative contracts, but a $484 million chunk of that has been promised to creditor JPMorgan Chase & Co.

Marsal further said Lehman had successfully sold off six jets and shares in the private plane service NetJets Inc. for $53 million. Still for sale are another seven planes, a helicopter and artwork valued at $30 million.

Running the defunct investment bank is costing about $25 million a month, excluding fees to be paid to professionals working on the case, Lehman lawyer Harvey Miller said.

Peck, the judge, said that while there was a "tremendous amount of money in the bank," lawyers and advisers should not see that as a license to spend.

"I am deeply concerned about the overall costs and expenses of this case," Peck said. "Just because the case is large, does not mean the case should be viewed as a blank check for professionals."

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