Fallout: The Financial Crisis

Lehman’s ‘mind-boggling’ debt

John Dimsdale Sep 16, 2008
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Fallout: The Financial Crisis

Lehman’s ‘mind-boggling’ debt

John Dimsdale Sep 16, 2008
HTML EMBED:
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TEXT OF STORY

Scott Jagow: Now, the Lehman bankruptcy could take years to resolve. The debt involved here is mind-boggling, an unprecedented $600 billion. But some of Lehman’s assets could be sold very quickly. Here’s John Dimsdale.


John Dimsdale: Lehman’s most valuable holdings are its asset management firm Neuberger Berman and its stock broker business. So far, those asset managers and brokers are still working. But Jack Williams with the American Bankruptcy Institute says Lehman only has a few days to sell.

Jack Williams: It involves these relationships with a large number of customers. Those customer relationships can be very valuable, but their value is effervescent.

In other words, it won’t be long before Lehman’s customers start looking elsewhere for brokerage and asset management services. Buying now would help any financial service company broaden its customer base, says James Ellman at the Seacliff Capital hedge fund.

James Ellman: There clearly are deep pools of capital that are very interested. The problem is, of course, it’s only at the right price, and whether or not those companies can get the borrowing funding to make the acquisitions at a reasonable price.

In bankruptcy, Ellman says, Lehman’s credibility with customers won’t last long.

In Washington, I’m John Dimsdale for Marketplace.

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