liquidated three funds and absorbed $1.8 billion in shaky assets in its balance sheet in the fourth-quarter, the investment bank disclosed in a regulatory filing.
The firm purchased short-duration, fixed-income investments from the liquidated funds with a fair value of $1 billion, according to its fiscal first-quarter report filed with the
Securities and Exchange Commission
. The investments were downgraded by ratings agencies and/or experienced a decline in fair value.
Separately, Lehman also purchased $800 million in deteriorated assets from similar funds to either redeem investors or make other investments.
Lehman made no mention of the fund liquidations when it
last month, leaving investors to wonder whether more skeletons remain in the closet. But while the firm didn't explicitly disclose the shuttering of the funds, it did include the associated losses in its first-quarter results, a source inside Lehman said Thursday.
Lehman has been dogged by rumors about its solvency ever since rival
collapsed after a run on the bank fueled by similar liquidity rumors last month. During its March 18 conference call, Lehman admitted that its Archstone real estate investment was valued substantially below par, fueling worries of the value of its holdings.
The firm has gone to great pains to
and dispel rumors.
, which had abandoned Bear as a counterparty, professed support for Lehman, helping matters.
The stock slid as much as 4.5% Thursday morning, but more recently was rising 1.1% to $40.98.