REUTERS - One-time financial powerhouse Lehman Brothers emerged from bankruptcy on Tuesday and is now a liquidating company whose main business in the coming years will be paying back its creditors and investors.

Lehman, whose September 2008 collapse is often regarded as the height of the financial crisis, will start distributing what it expects to be a total of about $65 billion to creditors on April 17, it said in a statement.

That first group of payments to creditors, many of whom lost money in its collapse 3-1/2 years ago, will be at least $10 billion, Lehman has said previously.

The move is a legal milestone, but does not indicate the immediate end of Lehman Brothers. The company will continue to operate, in the same midtown Manhattan headquarters it was in before bankruptcy, albeit on fewer floors, as it sells off its remaining assets before finally closing up shop.

"What our people were doing yesterday and what they are doing today has not changed," said Steven Cohn, an employee of restructuring firm Alvarez & Marsal who has worked as Lehman's treasurer since the bankruptcy began.

Now, however, the company has freedom to operate more like any other company outside of bankruptcy, he said. For instance, now that it is out of bankruptcy, Lehman no longer needs to ask court permission for every asset sale.

At the peak of its bankrupt operations, about 735 people were working at Lehman, compared with about 433 in January of this year. That's down from the 25,000 people Lehman Brothers employed before bankruptcy when Chief Executive Richard Fuld still ran the show . A new board will oversee the post-bankrupt company, Lehman said.

Lehman's bankruptcy exit comes amid economic uncertainty, as signs of a U.S. economic rebound, with lower unemployment, are tempered by a massive Greek debt restructuring and gloomy outlook for many European economies.

Still, it is far from the economic crisis that had engulfed the world's economies in 2008 when Lehman Brothers Holdings Inc (Other OTC:LEHMQ.PK - NewsLEHMQ.PK) filed its record $639 billion bankruptcy, 1,268 days ago. Its businesses around the world collapsed, and investors from the smallest towns to the largest pension funds lost money.

Lehman's fall rocked the foundations of global financial markets and contributed to the unfolding of the Great Recession.

PAYING BACK CREDITORS

Some of Lehman's most public bankruptcy negotiations focused on its reorganization plan, as it worked to get investor groups, including Wall Street firms like Goldman Sachs Group Inc (NYSE:GS - NewsGS.N) and hedge fund investors such as Paulson & Co, to agree on how much it would pay back each class of creditor.

In the end, they agreed that creditors, depending on their type of debt, will receive from about 21 cents to 28 cents on the dollar. Creditors had asserted more than $300 billion in claims.

"It was an extremely difficult and enormously time-consuming case," Harvey Miller, Lehman's lead attorney, told Reuters. "I had to increase my high blood pressure pills."

Bankruptcy Judge James Peck approved the creditor payback plan in December and Lehman has since been settling claims and selling assets. The company, which has about $35 billion in cash, is due to make a second payment to creditors in September and then will continue to make periodic distributions in the future as it sells off its remaining estimated $30 billion worth of assets.

Among the most notable of those holdings is the Archstone apartment real estate company.

CLAIMS, LAWSUITS REMAIN

While daily bankruptcy supervision is beh ind Lehman, the court process will continue for years due to various claims and lawsuits, adding to the more than 26,000 entries already on its court docket. The costs will continue to mount as well, although at a slower pace. As of January, it had spent more than $1.58 billion on professional fees, including lawyers and advisers.

Lehman still has several lawsuits related to the bankruptcy that are expected to go to trial, including with JPMorgan Chase (NYSE:JPM - NewsJPM.N) and Nomura Holdings (:8604.T8604.T).

In addition, a separate proceeding continues for brokerage customers where the U.S. government is gathering funds to pay them back.

The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.