NEW YORK, April 15 (Reuters) - Lehman Brothers Holdings Inc , which filed the largest bankruptcy in U.S. history, won a federal bankruptcy judge's approval on Thursday to create a new asset management company it says will help it raise more money to pay back creditors.
The creation of the company, known as LAMCO, will enable Lehman to unwind some of its assets over a longer period of time, potentially allowing it to make more money.
The move to create a new company, which some Lehman creditors had initially fought because of concerns about oversight and disclosures, is unusual in bankruptcies that are undergoing a liquidation.
'I've never seen anything quite like this,' U.S. Bankruptcy Judge James Peck said at a court hearing.
The firms that had been objecting to the move, such as Lehman's international entities and Wall Street creditors such as Bank of America and Credit Suisse, came to agreements with the company ahead of the hearing.
Lehman, which proposed the creation of the new company as part of the plan to emerge from bankruptcy that it submitted to the court on Wednesday, said the company will manage its private equity investments, real estate assets and other derivative assets.
Lehman has said that the move will allow it to keep employees on board to help manage the business at a time when the job market is strengthening and make it possible to sign on a possible joint venture partner. The company may manage assets for third parties as well.
'Implicit in the support of the major parties of interest is the apparent business judgment that there are in fact significant upside opportunities to be realized from this structure and putting the structure in place sooner rather than later,' Peck said.
Lehman filed for Chapter 11 protection from creditors on Sept. 15, 2008. It is gradually liquidating assets to pay creditors.
Much of Lehman's North American operations were taken over by Barclays Plc in the immediate aftermath of the bankruptcy filing.
The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555. Keywords: LEHMAN/LAMCO (Reporting by Caroline Humer; Writing by Jonathan Stempel, editing by Bernard Orr; email Caroline.Humer@thomsonreuters.com; Tel: 1-646-223-6181) COPYRIGHT Copyright Thomson Reuters 2010. 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.
The creation of the company, known as LAMCO, will enable Lehman to unwind some of its assets over a longer period of time, potentially allowing it to make more money.
The move to create a new company, which some Lehman creditors had initially fought because of concerns about oversight and disclosures, is unusual in bankruptcies that are undergoing a liquidation.
'I've never seen anything quite like this,' U.S. Bankruptcy Judge James Peck said at a court hearing.
The firms that had been objecting to the move, such as Lehman's international entities and Wall Street creditors such as Bank of America and Credit Suisse, came to agreements with the company ahead of the hearing.
Lehman, which proposed the creation of the new company as part of the plan to emerge from bankruptcy that it submitted to the court on Wednesday, said the company will manage its private equity investments, real estate assets and other derivative assets.
Lehman has said that the move will allow it to keep employees on board to help manage the business at a time when the job market is strengthening and make it possible to sign on a possible joint venture partner. The company may manage assets for third parties as well.
'Implicit in the support of the major parties of interest is the apparent business judgment that there are in fact significant upside opportunities to be realized from this structure and putting the structure in place sooner rather than later,' Peck said.
Lehman filed for Chapter 11 protection from creditors on Sept. 15, 2008. It is gradually liquidating assets to pay creditors.
Much of Lehman's North American operations were taken over by Barclays Plc in the immediate aftermath of the bankruptcy filing.
The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555. Keywords: LEHMAN/LAMCO (Reporting by Caroline Humer; Writing by Jonathan Stempel, editing by Bernard Orr; email Caroline.Humer@thomsonreuters.com; Tel: 1-646-223-6181) COPYRIGHT Copyright Thomson Reuters 2010. 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.
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