By Phil Wahba
NEW YORK, March 31 (Reuters) - Bankrupt Lehman Brothers Holdings Inc won court permission Tuesday to pump additional capital into one of its ailing banks for a third time, including a cash injection and a transfer of mortgage servicing rights to the bank.
The order by Judge James Peck of the U.S. Bankruptcy Court in Manhattan will allow Lehman to pump $15 million into the bank, Lehman Brothers Bank FSB, which is not bankrupt.
Lehman also plans to transfer its mortgage servicing rights to a bank affiliate and end a $1.375 billion line of credit extended to various Lehman units, including two of its banks, by a number of institutions, including General Electric Capital Corp in an effort to improve the bank's balance sheet.
Speaking in court, Lehman lawyer Alfredo Perez said the measures were necessary for the bank to meet U.S. government requirements.
'I am happy to say we are not flirting with 8 percent, we're flirting with 10 percent, which will reduce our funding costs,' Perez said, referring to required capital ratios.
Lehman will transfer part of its portfolio of mortgage servicing rights, which it said was worth about $140 million, to Aurora Loan Services, the mortgage-servicing unit owned by Lehman Brothers Bank.
In February, the U.S. Office of Thrift Supervision ordered the bank to bulk up its capital by the end of the month and show how it would maintain capital levels, threatening to seize the bank if it did not.
The case In re: Lehman Brothers Holdings Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Phil Wahba; editing by Jeffrey Benkoe) Keywords: LEHMAN/ (phil.wahba@thomsonreuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, March 31 (Reuters) - Bankrupt Lehman Brothers Holdings Inc won court permission Tuesday to pump additional capital into one of its ailing banks for a third time, including a cash injection and a transfer of mortgage servicing rights to the bank.
The order by Judge James Peck of the U.S. Bankruptcy Court in Manhattan will allow Lehman to pump $15 million into the bank, Lehman Brothers Bank FSB, which is not bankrupt.
Lehman also plans to transfer its mortgage servicing rights to a bank affiliate and end a $1.375 billion line of credit extended to various Lehman units, including two of its banks, by a number of institutions, including General Electric Capital Corp in an effort to improve the bank's balance sheet.
Speaking in court, Lehman lawyer Alfredo Perez said the measures were necessary for the bank to meet U.S. government requirements.
'I am happy to say we are not flirting with 8 percent, we're flirting with 10 percent, which will reduce our funding costs,' Perez said, referring to required capital ratios.
Lehman will transfer part of its portfolio of mortgage servicing rights, which it said was worth about $140 million, to Aurora Loan Services, the mortgage-servicing unit owned by Lehman Brothers Bank.
In February, the U.S. Office of Thrift Supervision ordered the bank to bulk up its capital by the end of the month and show how it would maintain capital levels, threatening to seize the bank if it did not.
The case In re: Lehman Brothers Holdings Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Phil Wahba; editing by Jeffrey Benkoe) Keywords: LEHMAN/ (phil.wahba@thomsonreuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.