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September 21, 2008 at 04:00 PM
Lehman Brothers Holdings Inc. says its broker-dealer division is not part of the Chapter 11 bankruptcy it filed Sept. 15. That division, along with its asset management unit, are not part of the agreement Lehman concluded last week to sell many of its operations to Barclays Bank P.L.C., London
Lehman’s broker-dealer division includes Neuberger Berman LLC, for which Lehman has been seeking a buyer for several months.
Lehman will continue to explore the sale of Neuberger Berman and is also in advanced talks with a number of potential purchasers to sell Lehman’s asset management unit, the company says.
Neuberger Berman and Lehman Brothers Asset Management “will continue to conduct business as usual and will not be subject to the bankruptcy case of its parent, and its portfolio management, research and operating functions remain intact,” Lehman said in a statement. “In addition, fully paid securities of customers of Neuberger Berman are segregated from the assets of Lehman Brothers and are not subject to the claims of Lehman Brothers Holdings creditors.”
The Securities and Exchange Commission also issued a statement seeking to reassure clients of Neuberger Berman.
The SEC said it will continue to require the broker-dealer to “conduct its affairs so as to minimize the effect of the holding company’s bankruptcy on customers, and that it ensure access to customer cash and securities.”
Meanwhile, the Securities Investor Protection Corporation, which maintains a reserve fund to help investors at failed brokerage firms, said it has not started a liquidation proceeding against Lehman Brothers and does not anticipate doing so.
