Lehman Bros., the demise of which is often blamed for the start of the credit crisis, will finally come out of Chapter 11, over three years after it went in. The process of disentangling it from all of its obligations and relationship with other financial firms cost hundreds of millions in legal fees. What is left of the process is a bank balance of $65 billion which will be distributed to creditors, many of which fought strongly for their pieces.
Now, under the supervision of seven new directors, Lehman Brothers’ litany of advisers, lawyers and ex-employees will remain busy. There’s $10 billion in real estate, $9 billion in private equity investments, $3 billion in corporate loans and $2 billion in derivatives left to sell, as well as several multi-billion legal battles left to fight.
“We’ve been liquidating since the date of filing,” said Steven Cohn, Lehman’s treasurer in bankruptcy. “Our job was to marshal assets and we’ve gone from very little cash to managing about $30 billion in cash.”
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