Court approves sale of Lehman units to Barclays
By Chad Bray
Last update: 10:51 a.m. EDT Sept. 20, 2008
NEW YORK (MarketWatch) - A federal judge early Saturday morning approved the sale of the U.S. broker-dealer and investment bank operations of Lehman Brothers Holdings Inc.
BCS) over the opposition of creditors.
Judge James Peck of the U.S. Bankruptcy Court in Manhattan signed off on the deal after an eight-hour hearing that started Friday afternoon in front of a packed courtroom that spilled into two other courtrooms.
Peck said rejecting the deal "could prove to be truly disastrous" given the jobs and customer accounts at stake. The harm to the global economy of not approving the sale would be "incalculable."
"Lehman Brothers became a victim, in effect the only true icon to fall in the tsunami that has befallen the credit markets, and it saddens me. I feel I have a responsibility to all of the creditors, to all of the employees, to all of the customers, and to all of you," Peck said.
Harvey Miller, Lehman's bankruptcy attorney, told Peck that approving the sale was crucial for the stability world financial markets, thousands of Lehman employees, and Lehman customers. Not approving the deal, he said, would be "a miscarriage of justice and a detriment to the national interest."
The Lehman unit being sold, Miller told Peck, would be "finished as an operating business," if the sale wasn't approved at the hearing.
"It will not have any value to anybody," he said. "The dangers here, your honor, are extraordinary."
Barclays agreed to pay $1.29 billion for Lehman's Manhattan headquarters and two data centers in New Jersey, after Lehman and the U.K. bank reached an agreement over the appraised value of the headquarters building. Barclays initially agreed to pay $1.5 billion for the properties. Barclays' is paying $250 million for Lehman's business operations. The deal saves about 9,000 Lehman jobs. |
