Unravelling Lehman Brothers

Unravelling Lehman Brothers

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In 2008 Lehman Brothers Holdings Inc filed a record $639 billion bankruptcy. Its businesses around the world collapsed, and investors from the smallest towns to the largest pension funds lost money.

Lehman's fall rocked the foundations of global financial markets and contributed to the unfolding of the Great Recession.

. WASHINGTON, United States. Reuters/Jonathan Ernst

Protestors hold signs behind Richard Fuld, Chairman and Chief Executive of Lehman Brothers Holdings, as he takes his seat to testify at a House Oversight and Government Reform Committee hearing on the causes and effects of the Lehman Brothers bankruptcy, on Capitol Hill.

The former chief executive and chairman has kept a low profile since he led the 161-year-old firm into bankruptcy, ending his own four-decade career at Lehman. Since 2009, Fuld has worked at Matrix Advisors LLC, a consulting and advisory firm he founded in midtown Manhattan. Fuld is the subject of several pending state and federal regulatory cases, and a raft of private litigation.

Lehman emerges from 3-1/2 year bankruptcy

One-time financial powerhouse Lehman Brothers emerged from bankruptcy on March 6, 2012 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 and 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.

Still, it is far from the economic crisis that had engulfed the world's economies in 2008 when Lehman Brothers Holdings Inc filed its record $639 billion bankruptcy. Its businesses around the world collapsed, and investors from the smallest towns to the largest pension funds lost money.

Lehman's fall rocked the foundations of global financial markets and contributed to the unfolding of the Great Recession.