While Lehman Brothers might be dead and buried in the Wall Street catacombs, there is still money to be made on its corpse.

The amount of money to earn just increased, too, with Lehman Brothers Holdings Inc. announcing today that they will distribute an additional $17.9 billion on April 3 to creditors still looking to recover debts owed since the broker-dealer’s market-crushing bankruptcy in September of 2008. The latest figures bring the total payout to just over $80 billion.

Interestingly, the vast majority of claim distributions thus far, over two-thirds, have been to third-party creditors — companies that purchased Lehman's debt after the bankruptcy was underway. Lehman’s claims are currently owned by some of the industry’s largest distressed hedge funds, including Elliot Associates, King Street, CarVal and Baupost. None of these firms are strangers to profiting from bankruptcies. These so-called “vulture funds” buy debt at a low price during the most vulnerable time, then later recover for the full value of the loans, plus interest. 

The April 3rd distribution will offer $11.7 billion to third-party claims, including non-controlled affiliate claims; $5.1 billion to Lehman Debtors and their controlled affiliates; and $1.1 billion in back dated claims. This will be the fifth distribution from Lehman, and the second largest. 

These third-party creditors include hedge funds, many of which purchased these claims at a steep discount following the Lehman bankruptcy. The purchase of Lehman's debt has become a valuable and crowded trade among hedge funds, as creditors are guaranteed a stream of income while holding Lehman debt. Because Lehman Brothers was a behemoth company with immense value, its liquidation would release substantial cash that would eventually pad the pockets of the creditors. Though creditors have had to wait years for this cash to come their way, the sheer size of the distributions has shown that patience does indeed pay off.    

Based on the original December 2011 liquidation plan, Lehman was valued at $65 billion, and it was expected that the company's creditors would receive 18 cents on the dollar by 2016However, with this most recent distribution, Lehman’s value has increased from $65 billion to $80.4 billion. This increase stemmed from a variety of reasons, including rising valuations of Lehman's assets and the "crowding" of the Lehman trade, which drove up bond prices.

Subsequently, Harvey Miller, the attorney advising Lehman Brothers Holdings, Inc., estimates that recovery could be as much as 22 cents on the dollar. A even higher payout of 26.9 cents on the dollar is expected for holders of senior unsecured claims. That a nice healthy return for those hedge funds that got in on the deal.

So how much exactly do these third-party creditors stand to make on Lehman’s collapse and eventual distribution? The exact number is difficult to quantify, but it is safe to say it will be well into the billions. The total payout of $80 billion is much less than the $308.7 billion in claims authorized by the bankruptcy court, but these creditors purchased Lehman’s debt at an undisclosed, but guaranteed, lower price. 

Or to take another example, Elliot Associates’ founder Paul Singer, bought $11 million in debt from the nation of Peru, and was eventually repaid $58 million. 

All in all, hedge funds are making out from this deal beyond the actual payout itself. An increase to 22 cents on the dollar means hedge funds will walk away with 22 percent of the claim’s face value in cash. In the meantime, they also make money on trading their Lehman claims in the open market. More than five years since Lehman's shocking demise, these “vulture funds” continue to profit on the largest economic collapse in recent history.