has reached a deal to sell parts of its business to
, a day after failing to land a deal and filing for bankruptcy, the
The businesses Lehman is selling and the terms of the deal were unclear, but sources close to the matter told the
that it centered on Lehman's U.S. broker-dealer operations. Barclays and
Bank of America
had been one of
two main suitors before talks collapsed over the weekend. Barclays backed out and BofA bought
The 158-year-old investment bank filed for Chapter 11 protection Monday to "protect its assets and maximize value," Lehman said in a statement.
complicated unwinding will involve the firm making certain motions so that it can continue to manage its operations.
None of the broker-dealer subsidiaries or other subsidiaries of Lehman will be included in the filing and all of the broker-dealers will continue to operate, the company said. Lehman customers, including those of its
subsidiary, may continue to trade or take other actions on their accounts.
Lehman's bankruptcy filing listed debts of $613 billion and named banks from Tokyo, Hong Kong, New York, Singapore, Taipei and elsewhere as unsecured creditors owed hundreds of millions of dollars,
The Wall Street Journal
The agreement by the banks and Fed to attempt to smooth the impact of a liquidation came out of a series of emergency meetings over the weekend, at which government officials and top Wall Street executives tried to work out a rescue plan for Lehman. At the same time, employees of investment banks were scrambling to assess their own firms' exposure to Lehman and considering entering into credit default swap agreements with other banks that would effectively cancel out agreements they had with Lehman.
Government officials, including Treasury Secretary
, had said they were reluctant to provide funding or guarantees for a Lehman rescue.
The government is finding itself increasingly on the hook for the credit crisis that began to envelope financial institutions last summer. Last week, it took over troubled mortgage giants
, and earlier this year, the Fed agreed to backstop
purchase of failing investment bank
This article was written by a staff member of TheStreet.com.