Lehman emerges from 3.5-year bankruptcy
By Caroline Humer
(Reuters) - One-time financial powerhouse Lehman Brothers emerged from bankruptcy on Tuesday and is now a liquidating company whose main business in the coming years will be paying back its creditors and investors.
Lehman, whose September 2008 collapse is often regarded as the height of the financial crisis, will start distributing what it expects to be a total of about $65 billion to creditors on April 17, it said in a statement.
That first group of payments to creditors, many of whom lost money in its collapse 3-1/2 years ago, will be at least $10 billion, Lehman has said previously.
The move is a legal milestone, but does not indicate the immediate end of Lehman Brothers. The company will continue to operate, in the same midtown Manhattan headquarters it was in before bankruptcy, albeit on fewer floors, as it sells off its remaining assets before finally closing up shop.
"What our people were doing yesterday and what they are doing today has not changed," said Steven Cohn, an employee of restructuring firm Alvarez & Marsal who has worked as Lehman's treasurer since the bankruptcy began.
Now, however, the company has freedom to operate more like any other company outside of bankruptcy, he said. For instance, now that it is out of bankruptcy, Lehman no longer needs to ask court permission for every asset sale.
At the peak of its bankrupt operations, about 735 people were working at Lehman, compared with about 433 in January of this year. That's down from the 25,000 people Lehman Brothers employed before bankruptcy when Chief Executive Richard Fuld still ran the show . A new board will oversee the post-bankrupt company, Lehman said.
Lehman's bankruptcy exit comes amid economic uncertainty, as signs of a U.S. economic rebound, with lower unemployment, are tempered by a massive Greek debt restructuring and gloomy outlook for many European economies. Continued...