Lehman plans to end bankruptcy, create new company
Wednesday, 17 March 2010
NEW YORK, Mar 16 (Reuters): Lehman Brothers Holdings Inc Monday filed a plan with the US bankruptcy court in Manhattan to wind down its remaining assets and operations -- and end the largest US bankruptcy case in history.
Under the proposed Chapter 11 plan, a newly created business called LAMCO would manage what is left of Lehman's commercial real estate, mortgages, principal investments, private equity, corporate debt and derivatives assets.
Lehman filed for bankruptcy on Sept 15, 2008, listing more than $600 billion of assets. It quickly sold its biggest units like its core US brokerage and Neuberger Berman wealth management subsidiary, but hundreds of Lehman employees hired by the bankruptcy estate have been managing the company's long-term investments in real estate and private equity since the bankruptcy.
Lehman's ability to quickly sell its core assets and then propose an end to its bankruptcy about a year and a half after filing the most complicated case ever was seen as a triumph for the US bankruptcy system.
"Lehman went in and there was real concern whether bankruptcy could handle something like that," Jack Williams, a bankruptcy law professor at Georgia State University, said Monday. "(The detractors) were wrong then and they're wrong now ... It works for small, medium and gargantuan businesses."
Lehman said the reorganisation plan, which it has worked on for months, would provide a global and efficient resolution to the company's bankruptcy, by resolving creditor claims and even those claims that various Lehman entities have against each other.
Under the proposed Chapter 11 plan, a newly created business called LAMCO would manage what is left of Lehman's commercial real estate, mortgages, principal investments, private equity, corporate debt and derivatives assets.
Lehman filed for bankruptcy on Sept 15, 2008, listing more than $600 billion of assets. It quickly sold its biggest units like its core US brokerage and Neuberger Berman wealth management subsidiary, but hundreds of Lehman employees hired by the bankruptcy estate have been managing the company's long-term investments in real estate and private equity since the bankruptcy.
Lehman's ability to quickly sell its core assets and then propose an end to its bankruptcy about a year and a half after filing the most complicated case ever was seen as a triumph for the US bankruptcy system.
"Lehman went in and there was real concern whether bankruptcy could handle something like that," Jack Williams, a bankruptcy law professor at Georgia State University, said Monday. "(The detractors) were wrong then and they're wrong now ... It works for small, medium and gargantuan businesses."
Lehman said the reorganisation plan, which it has worked on for months, would provide a global and efficient resolution to the company's bankruptcy, by resolving creditor claims and even those claims that various Lehman entities have against each other.