(Reuters) - Lehman Brothers Holdings Inc LEHMQ.PK received $850 million from the sale of its equity in investment management business Neuberger Berman and said the funds will be available for distribution to unsecured creditors.
Lehman said when completed the sale will fetch it around $1.5 billion and combined with previous proceeds from the sale of its stake it has till date received over $1 billion.
In addition to boosting Lehman’s creditor paybacks, the sale paves the way for the elite wealth manager to become fully employee owned and independent.
“This transaction provides an immediate and significant recovery to Lehman’s creditors, and we expect to provide additional value to creditors as Neuberger Berman moves toward 100 percent employee ownership over the next few years,” said William Fox, chief financial officer of Lehman and director of Neuberger Berman.
Neuberger was a pioneering mutual fund manager and one of the country’s leading investment firms when it listed on the New York Stock Exchange in 1999. Lehman acquired it in 2003 for $2.6 billion, and the company thrived as part of the fast growing investment bank and securities firm.
Earlier this month, one-time financial powerhouse Lehman emerged from bankruptcy after three and a half years and is now a liquidating company whose main business in the coming years will be to pay back its creditors and investors.
On April 17, Lehman will start distributing what it expects to be a total of about $65 billion to creditors.
The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
Reporting by Tanya Agrawal in Bangalore; Editing by Sriraj Kalluvila