Drexel to Offer Full Payoff for Creditors : Bankruptcy: Company reportedly will propose entity to issue notes and pay them off as bonds and other investments are sold.

Drexel Burnham Lambert Group Inc. will present creditors today with a reorganizAtion plan that will pay them one dollar for every dollar owed, a newspaper reported.

The proposal is expected to be announced this afternoon at a meeting between the creditors and Drexel’s law firm, Weil, Gotshal & Manges, The New York Times said in an early edition of today’s paper.

Bankruptcy advisers put the meetings among the most significant to date. They are to include A. Robert Abboud, the chairman and chief executive of Houston’s First City Bancorporation of Texas, which Drexel owes $25 million, the newspaper reported.

“It will begin the process of formulating a reorganization plan with all of Drexel’s constituents,” said Alan B. Miller, Drexel’s lead bankruptcy lawyer.

The court-appointed creditors committee is eXpected to meet on Thursday to respond to Drexel’s plan, the newspaper said.

Weil, Gotshal lawyers already have told some creditors that Drexel would seek to repay them through a new company that would hold Drexel’s portfolio of junk bonds, bridge loans and other securities, the paper said.

A representative of one creditor said Drexel values its holdings at about $2 billion but cannot sell most of the assets readily because of their poor quality and the weak state of the junk bond market, the newspaper said.

As a result, the company will propose creating a new entity to issue notes to creditors and pay down those notes as the bonds and other investments are sold, it said.

Drexel Burnham Lambert Inc.--once one of the nation’s most powerful brokerages--said it and other Drexel entities are defendants in more than 400 legal actions and have been threatened with more claims.

“The inevitable race to the courthouse, absent Chapter 11, would result in the dismemberment of the debtors, and their assets,” Drexel said in a filing.

Creditors’ representatives said a critical stumbling block to Drexel’s plans will be the guarantees the firm can make about the value of its investments.

The reorganization proposal will cover all Drexel bankruptcy filings, including last week’s Chapter 11 filing of the company’s investment banking arm, Drexel Burnham Lambert Inc.

The holding company filed for Chapter 11 in February because of a liquidity crisis brought on by its holdings of junk bonds and other investments.

Meanwhile today, a prosecutor in Spain said he has filed criminal charges against three former officers of the Spanish unit of Drexel Burnham Lambert Inc. for alleged fraudulent trading practices.

Madrid Superior Court prosecutor Jesus Silva Pinto’s filing Tuesday accused the three men of using fraudulent business documents to obtain shares during the partial privatization of the state-controlled Repsol SA oil firm in April, 1989, court sources said.

The criminal charges were believed to be the first filed against a securities firm in Spain for actions that until now have been handled through administrative sanctions, according to the sources.