Decision Assures Quick and Orderly Transfer of Customer Accounts
(LAWFUEL) Washington, DC, Sept. 20, 2008—Securities and Exchange Commission Chairman Christopher Cox announced that U.S. Bankruptcy Court Judge James M. Peck this morning approved the sale of substantially all of the assets of Lehman Brothers, Inc., to Barclays Capital. The court’s approval, just days after Lehman’s parent company filed for bankruptcy, brings immediate and significant benefits to Lehman’s brokerage customers and the capital markets.
The court’s decision followed a marathon eleven-hour hearing in a packed Manhattan courtroom where attorneys from the SEC and other government agencies successfully supported Lehman’s argument that swift approval of the deal was in the national interest.
The court’s approval means that the hundreds of thousands of Lehman’s customer accounts can be transferred without undue interruption, instead of going through a lengthy brokerage liquidation process that can take weeks and impair customer access to cash and securities. The transfer of most retail accounts, which hold over one hundred billion dollars in assets, is expected to be completed within days. In one of the last liquidations of a major securities firm, when Drexel collapsed in 1990, it was weeks before customer accounts were transferred to a new firm. The expeditious transfer of Lehman’s assets also avoids disruption of capital markets because securities transactions will continue to be completed and Lehman’s counterparties can confidently continue to do business with the firm.
“Every investor and every market participant, not just Lehman’s customers and employees, has every reason to cheer today’s court decision,” said SEC Chairman Christopher Cox. “The SEC is proud to have overseen and helped to arrange this unprecedented resolution that avoids what could have been a long, painful ordeal for Lehman’s customers and our capital markets. I especially want to applaud the court and the dedicated, creative, and tireless SEC professional staff who helped achieve this result in record time.”
The SEC appreciates the close cooperation of the Federal Reserve, SIPC, CFTC, FINRA, the UK Financial Services Authority, Barclays and Lehman in achieving the resolution approved today.List your legal jobs on the LawFuel Network