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Rating:Neuberger Stake Sale Brings $850 Million to Lehman Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, March 19, 2012

Neuberger Stake Sale Brings $850 Million to Lehman

News summary by MFWire's editors

Lehman Brothers Holdings has received $850 million for its preferred equity interest in Neuberger Berman [profile].

The Associated Press, Bloomberg and Reuters picked up on the news.

According to a press release issued by Lehman Brothers Holdings last Friday, the funds will be available for unsecured creditors when Lehman makes its initial distribution on April 17.

Back in December, Lehman Brothers Holdings disclosed that it was selling its stake in Neuberger Berman. At the time, Lehman said the transaction will yield approximately $1.5 billion in aggregate proceeds.

Taking into account the $850 million and prior proceeds, Lehman Brothers Holdings said last Friday it has received more than $1 billion since the completion of the transaction.
Company Press Release

Lehman Brothers Holdings Inc. Receives $850 Million for Its Preferred Equity Interest in Neuberger Berman

NEW YORK, Mar 16, 2012 -- Lehman Brothers Holdings Inc. announced today that it received $850 million from Neuberger Berman Group LLC ("Neuberger Berman") in connection with the retirement of its entire outstanding preferred equity holding in Neuberger Berman. The funds will be available as anticipated for unsecured creditors when Lehman makes its initial distribution, scheduled for April 17, 2012.

Lehman has disclosed previously that, when completed, its monetization of Neuberger Berman holdings will generate approximately $1.5 billion in aggregate proceeds -- almost double what would have been generated by a competing offer received post-bankruptcy in 2008. Combined with prior proceeds, LBHI has now received over $1 billion since completing this transaction, which represents the Lehman estate's largest monetization to date.

At the December 14, 2011 hearing before the United States Bankruptcy Court for the Southern District of New York, the transaction was described as a significant achievement for Lehman and a significant benefit for their creditors as well as illustrative of the strategy that the debtors have employed throughout these cases to enhance the Lehman estate's asset values.

William J. Fox, serving as CFO of Lehman since February 2009 and as a director of Neuberger Berman representing Lehman's interest in Neuberger Berman, said: "This preferred share redemption is another important milestone in our continuing efforts to achieve maximum returns from our Neuberger Berman holdings. Importantly, 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% employee ownership over the next few years."

Neuberger Berman, established in 1939 and independent for most of its history, expects to utilize excess cash flow and additional employee investments over the coming 4-5 years to retire the Estate's remaining minority common interest in Neuberger Berman.

Edited by: Armie Margaret Lee

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