Lehman Brothers Bankruptcy : Official announcement about Chapter 11 bankruptcy filing

Well the rumours have been swirling for quite a while now, but now it’s offical from Lehman Brothers themselves.

Lehman Brothers office building and logo

In an official release about their chapter 11 bankruptcy filing posted to their website (PDF format warning)… they stated the following:

For Immediate Release

Media Contact: Monique Wise

1-646-333-9056

Investor Contact: Shaun Butler

1-212-526-8381

LEHMAN BROTHERS HOLDINGS INC. ANNOUNCES IT INTENDS TO FILE CHAPTER 11 BANKRUPTCY PETITION; NO OTHER LEHMAN BROTHERS’ U.S. SUBSIDIARIES OR AFFILIATES, INCLUDING ITS BROKER-DEALER AND INVESTMENT MANAGEMENT SUBSIDIARIES, ARE INCLUDED IN THE FILING

NEW YORK, September 15, 2008 – Lehman Brothers Holdings Inc. (“LBHI”) announced today that it intends to file a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. None of the broker-dealer subsidiaries or other subsidiaries of LBHI will be included in the Chapter 11 filing and all of the broker-dealers will continue to operate. Customers of Lehman Brothers, including customers of its wholly owned subsidiary, Neuberger Berman Holdings, LLC, may continue to trade or take other actions with respect to their accounts.

 

The Board of Directors of LBHI authorized the filing of the Chapter 11 petition in order to protect its assets and maximize value. In conjunction with the filing, LBHI intends to file a variety of first day motions that will allow it to continue to manage operations in the ordinary course. Those motions include requests to make wage and salary payments and continue other benefits to its employees.

LBHI is exploring the sale of its broker-dealer operations and, as previously announced, is in advanced discussions with a number of potential purchasers to sell its Investment Management Division (“IMD”). LBHI intends to pursue those discussions as well as a number of other strategic alternatives.

Neuberger Berman, LLC and Lehman Brothers Asset Management will continue to conduct business as usual and will not be subject to the bankruptcy case of its parent, and its portfolio management, research and operating functions remain intact. In addition, fully paid securities of customers of Neuberger Berman are segregated from the assets of Lehman Brothers and are not subject to the claims of Lehman Brothers Holdings’ creditors.

Lehman Brothers (ticker symbol: LEH) is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. For further information about Lehman Brothers, visit the Firm’s Web site at www.lehman.com

The Australian Securities Exchange has officially halted trading on LEH.N and it’s quite certain that the North American markets (including the NYSE, NASDAQ, TSX) will be in similar turmoil both pre-market and at the opening bell on Monday morning once the markets open.

This is indeed big news, as the failure of Lehman Brothers is the biggest crash since the Drexel Burnham Lambert collapse back in 1990.

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