This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Lehman Creditors Face Complex Unwind

Citigroup's unsecured creditors are scheduled to meet Tuesday to form an official committee to represent their interests. Citi's unsecured debt was trading for around 34 cents on the dollar on Monday.

In the meantime, Lehman is taking steps to sell assets. It said in a press release Monday it is trying to sell its broker-dealer unit and is continuing negotiations to sell its investment management division, which includes its prized Neuberger Berman subsidiary.

The Wall Street Journal said Neuberger was believed to be worth $5 billion. But given the current turmoil in the market, valuing any financial asset is extremely difficult. Neuberger was not part of the bankruptcy filing, which was made by Lehman Brothers Holdings.

Barclays (BCS) confirmed that it is interested in acquiring some assets of Lehman Brothers, the Associated Press reports.

"Barclays confirms that it is discussing with Lehman Brothers the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclays shareholders," the company said in a brief announcement to the London Stock Exchange, the AP reported.

Sanford Bernstein analyst Brad Hintz estimates that 55% of Lehman's balance sheet can be quickly liquidated, particularly such assets as receivables and short-term loans known as repurchase agreements. There are about $269 billion in securities that are "another story," Hintz wrote in a report released Monday. He estimates 27% of the $269 billion is in mortgages, 17% in derivatives, and 8% in real estate.

"Liquidation of these positions will not be easy to achieve," he writes.

As Lehman winds down and creditors mobilize themselves, financial institutions around the world will be assessing their exposure to Lehman, both direct and indirect, and working to stave off potential aftershocks.

One company that jumped out in front in this respect was Merrill Lynch (MER), which agreed to sell itself to Bank of America (BAC), to save itself from potentially sharing Lehman's fate.

Indeed, the fortunes of financial companies are more closely tied to those of their competitors than is the case in other industries.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,065.60 +34.46 0.20%
S&P 500 1,985.79 +1.66 0.08%
NASDAQ 4,510.6880 -8.2140 -0.18%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs