It is a fair expectation that Lehman will be selling these units before they meet up with a huge loss due to customer withdrawal.

The chapter 11 filing marks the end of the 158-year old company that has sustained and performed better despite meeting up with world wars.  The US government denied to back the Lehman’s and the bankruptcy filing does come after a lot of heated negotiations between regulators and the Wall Street firms relating to the fate of the Lehman Brothers Holdings Inc.

The Lehman Brothers Holdings Inc have posted a loss of $3.9 billion for its third fiscal quarter in the end of August, followed by a $2.8 billion loss in the second quarter.  A $13.8 billion loss has been documented due to the sub-prime mortgage crisis and they have raised a $10 billion through share offerings this year.  The share value of the Lehman Brothers has also dripped from a high point of $66 in February to less than $10!

Lehman has a reported asset of $600 billion that has been financed with just $30 billion of equity at the end of August; this signifies that a 5% decline in assets will wipe off the value of the company.  Investors did see this risk, and thanks to the billions of dollars of mortgage securities of the company.

Lehman has declared that they owned a $110.5 billion in the account of senior unsecured notes and about $12.6 billions in the account of subordinated unsecured notes and $5 billion on account of junior subordinated notes. 

It is expected that Lehman brothers will be raising their capital by selling off a stake in their investment unit, and use the amount as well as other funds to turn off some of its assets to shareholders; however, this plan does not satisfy investors because the share value has done from $66 to a few dollars that is less than $10!

Lehman still claim that Neuberger Berman asset management unit will continue to operate. Will it?