Lehman Brothers Files For Bankruptcy
NEW YORK — Lehman Brothers has filed for bankruptcy protection under the weight of $60 billion in soured real estate holdings.
The company’s filing for Chapter 11 protection will allow it to restructure while creditor claims are held at bay. The filing was made Monday in the U.S. Bankruptcy Court in the Southern Disctrict of New York.
Lehman’s last hope of surviving outside of court protection faded Sunday after British bank Barclays PLC withdrew its bid to buy the investment bank.
The 158-year-old investment bank had said earlier that none of its broker-dealer subsidiaries or other units would be included in the Chapter 11 filing. It says it is exploring the sale of its broker-dealer operations and is in “advanced discussions” to sell its investment management unit.
Stock prices are sharply lower in early trading. The Dow Jones Industrial Average is down 321 points in Monday’s early going.
The Nasdaq Composite Index is off 52 points and the Standard-and-Poor’s 500 Stock Index is down 36 points.
Bank of America is buying Merrill Lynch in a 50-billion dollar deal that would create a bank offering everything from fixed-income trading to credit-card lending. It would rival Citigroup, the biggest U.S. bank in terms of assets.
The deal values Merrill at 29 dollars a share. That’s a 70 percent premium over Friday’s close.
Oil prices, meanwhile, have plunged to a seven-month low. That’s in reaction to indications that oil installations along the Gulf Coast emerged relatively unharmed after Hurricane Ike. Light, sweet crude for November delivery was recently trading below $96 a barrel.
