NPR logo

If You Want A Piece Of Lehman, What's Left?

  • Download
  • <iframe src="https://www.npr.org/player/embed/94807851/94807824" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
If You Want A Piece Of Lehman, What's Left?

If You Want A Piece Of Lehman, What's Left?

  • Download
  • <iframe src="https://www.npr.org/player/embed/94807851/94807824" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

MADELEINE BRAND, host:

Back now with Day to Day, I'm Madeleine Brand. You know, you can buy Lehman Brothers swag on eBay. People are bidding on duffle bags and baseball caps. The Wall Street bank filed up for bankruptcy on Monday. A federal judge is expected to sign off today on the piece-by-piece sell-off of the firm's assets. A lot of those assets will go to Barclays Bank. That's based in the U.K. Marketplace's Janet Babin is here now, and Janet, I assume they're not bidding on duffle bags and baseball caps. So, what's left for Barclays?

JANET BABIN: No, there's a lot of good stuff apparently, Madeleine. Barclays is expected to buy Lehman's brokerage business, and that includes things like client accounts, names and phone numbers of clients. More than 10,000 Lehman employees will become Barclays' employees as part of the steal. Barclays will have to pay some severance to those employees that don't transfer over. Barclays is also getting hard assets, like buildings, Lehman's New York headquarters and two data centers in New Jersey. And it's getting all these for a bargain price of about $1.75 billion. Just a short time ago, last weekend, Barclays was looking into buying Lehman Brothers before it had filed for bankruptcy, and the numbers being thrown around at that time were more like $7 billion. So, you can see the bargain price that Barclays is getting here.

BRAND: Yeah, quite a deal. Anyone else in court today?

BABIN: Yeah, anyone who has an interest in some of Lehman's assets, obviously Barclays, but there's a lot of other companies that might be interested in the leftover assets that will be up for sale. In addition to the brokerage firm, Lehman has got commercial real estate. It's got a private equity arm. It's got some hedge funds. And it has Archstone, and that's a company that manages apartment complexes. I spoke with Rob Hegarty about this today. He's with financial industry research firm Tower Group. And he says, you know, Lehman Brothers is more than a hundred years old and its assets are being unwound here in a matter of days. So we're going to get a lot of information that's going to be revealed today in court about Lehman Brothers.

Mr. ROBERT HEGARTY (Managing Director, Securities & Investments, Tower Group): Information is coming to the surface every minute about Lehman Brothers. This is stuff that is not, you know, public record all the time. It's not until a company goes into bankruptcy that its financial books are, you know, open for the world to see.

BABIN: So, nothing is actually being sold today, but we will get a rundown of assets and liabilities that Lehman has.

BRAND: So, Janet, what's not decided in today's bankruptcy proceedings?

BABIN: Well, there will be some stuff that doesn't get unloaded, and whatever isn't scooped up could eventually be bought up by firms known as the vulture investors. And just like it sounds, these are buyers that pick over what's left, and they might be interested in some of Lehman's toxic assets, those mortgage-backed securities, stuff that appears worthless right now. But Hegarty says, if you wait awhile, those assets can end up being worth as significant amount of money. And he points, as an example, to the junk-bond market that had this happen back in 1990. Junk bonds ended up being worth at least something.

BRAND: Thanks, Janet. That's Janet Babin of public radio's daily business show, Marketplace.

Copyright © 2008 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.