WILMINGTON: Two affiliates of Lehman Brothers, the US investment bank that collapsed in 2008 and fuelled an economic crisis, filed for Chapter 11 bankruptcy, a reminder of the complexity of unwinding a global financial institution.
The two affiliates, Lehman Brothers UK Holdings (Delaware) Inc and Lehman Pass-Through Securities Inc, were put into bankruptcy as part of a deal that will generate $485 million cash for the Lehman estate, according to court documents.
The affiliates own residential mortgage-backed securities, real estate and stock in First Data Corp, which helps process credit card transactions, among other assets, according to papers filed in the US bankruptcy court in Manhattan. Affiliates of Brookfield Asset Management Inc of Canada are buying stakes in the Lehman affiliates, which were put into bankruptcy to carry out the deal.
Administrators have spent years winding down Lehman’s holdings and have distributed around $147 billion to creditors, according to court records.
More than 100 people still work for Lehman and the case remains one of the largest US bankruptcies, even after the distributions to creditors. The estate holds $7 billion of assets, much of it cash, as it works through hundreds of remaining creditor claims and legal disputes. — Reuters
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