USA: Talks to sell Lehman Brothers bank falter and employees begin taking out their personal belongings from the head office in New York

Record ID: 486149

  • Title: USA: Talks to sell Lehman Brothers bank falter and employees begin taking out their personal belongings from the head office in New York
  • Date: 15th September 2008
  • Summary: (BN02) NEW YORK CITY, NEW YORK, UNITED STATES (SEPTEMBER 14, 2008) (REUTERS) FEDERAL RESERVE BANK OF NEW YORK, VENUE FOR A MEETING ON EMERGENCY NEGOTIATIONS ON THE FATE OF INVESTMENT BANK, LEHMAN BROTHERS U.S. FLAG FLYING ON THE FEDERAL RESERVE BANK OF NEW YORK VARIOUS OF PEOPLE ATTENDING THE MEETING LEAVING IN BLACK LIMOUSINES A BLACK LIMOUSINE PARKING IN THE GARAGE OF THE FEDERAL RESERVE BANK OF NEW YORK SECURITY OUTSIDE THE FEDERAL RESERVE BANK OF NEW YORK BUILDING AND PEOPLE LEAVING THE MEETING
  • Embargoed: 30th September 2008 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Economic News
  • Reuters ID: LVA6RVOI1S3VM7QHFSZLA41U7G7B
  • Story Text: American investment bank Lehman Brothers is expected to declare bankruptcy, as hundreds of employees of the New York firm are seen leaving the office building with their personal belongings.
    The ruptured U.S. financial system was facing an unprecedented shakeup on Sunday (September 14) that was expected to lead to the failure of investment bank Lehman Brothers, the takeover of Merrill Lynch & Co and big asset sales by major insurer American International Group.
    Growing expectations that Lehman will become Wall Street's most high profile bankruptcy since junk bond specialist Drexel Burnham Lambert collapsed in 1990 sparked a sell-off in U.S. asset prices.
    The focus early Sunday was on whether talks between regulators and Wall Street's top bankers would lead to the sale of Lehman, until recently the No.
    4 U.S. investment bank. The talks were held at the Federal Reserve Bank of New York on Wall Street.
    All day long on Sunday, black limousines pulled in and out of the meeting venue, as bankers left or entered the meeting.
    Those talks faltered when Britain's Barclays Plc, which had appeared to be front-runner to take over Lehman -- excluding its toxic mortgage-related assets -- said it had pulled out of the bidding.
    That triggered expectations the investment bank was heading into bankruptcy and prompted a rare emergency trading session to allow Wall Street dealers in the $455 trillion derivatives market to reduce their exposure to the firm.
    Sunday's events signaled a transformation in the power structure on Wall Street with major banking groups like Bank of America Corp, which is bidding for Merrill, and JPMorgan Chase & Co becoming more dominant.
    If Lehman and Merrill disappear or get taken over, then three of the top five U.S. investment banks would have dissolved or been bought inside six months. Bear Stearns was acquired in a fire sale by JPMorgan in March.
    Lehman has been collapsing under the weight of toxic assets, mainly related to real-estate, that are now worth only a fraction of their original prices. The crisis at Lehman presented a delicate balancing act for the Federal Reserve, which has urged Wall Street chiefs to come up with their own solution. So far this year, the government has sponsored rescues of Bear Stearns and mortgage lenders Freddie Mac and Fannie Mae.
    Bankruptcy would mark an ignominious end to a once-proud firm, founded by cotton-trading German immigrants 158 years ago. It would also badly tarnish the reputation of CEO Dick Fuld, who has insisted that his firm could work through its problems to survive as an independent entity.
    Hundreds of Lehman employees went into the office on Sunday to clear desks and pack personal belongings. Many even opted to say their farewells with one last office soiree. Mo Grimeh a Managing Director with the Fixed Income department at Lehman Brothers walked out of the building holding a "Lehman Brothers" sign and making a victory sign with one hand. He said he felt "anger, sadness" and added that many Lehman Brothers employees were expecting to take long holidays considering the possibility that they wouldn't have jobs to come back to.
    Another Lehman Brothers employee - Gulperi Furtun, Associate Vice President in the Assets Management section of Lehman Brothers was asked by reporters about the role the government might be playing in helping the firm.

    "They're not helping us out. I don't think they're going to help us out. That's what it looks like. They helped Bear and I think we were just unlucky ones, seriously," she said.
    Other employees leaving Lehman Brothers refused to speak to reporters, saying everyone should just keep watching the news.
    Headhunters and consultants said the talent-flush U.S. market -- which has shed more than 100,000 financial-sector jobs this year -- must now brace for up to 50,000 more.
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