Lehman looks to recruit 480 former employees back to company to track down information, wind down businesses

By Caroline Salls

Pittsburgh, Oct. 30 - Lehman Brothers Holdings, Inc. requested court approval of a program designed to retain and recruit employees "with the knowledge and skill to effectively manage and monetize Lehman's assets for the benefit of all stakeholders," according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, the company is looking to retain roughly 140 of its current employees that remained after the closing of its asset sale and to recruit 480 former employees to help the company administer its Chapter 11 cases and wind-down its businesses.

Lehman said its current workforce is too small to manage the process of preserving the company's assets and maximizing recoveries without unnecessary expenses and delays.

The company said it needs employees that can devote all of their time to the company's interest in preserving and maximizing values and the administration and wind-down of Lehman's businesses.

Lehman said it is formulating plans that depend on its current employees and former workforce, who will capture and store key data to be used to reconstruct transactions and events and determine the appropriate course of action.

This information will enable the company to respond to information requests, notices of default or early termination letters that impact asset values and claims.

Under the retention and recruitment program, the current and former employees will be divided into asset divestiture and operational teams.

The asset divestiture team will be broken up into smaller teams that oversee the administration and wind-down of the company's loan book, derivatives book, private equity/proprietary portfolios, international operations, domestic banks, real estate portfolios and other assets.

Meanwhile, the operational team would be divided into smaller teams that oversee audits and claims, treasury, accounting and finance, wind-down and transition, data preservation, forensic analysis and review and information technology.

Program costs

Lehman said Alvarez & Marsal designed the program to retain current employees and attract former employees in exchange for a compensation package that rewards them for achieving defined project objectives and continuing their employment during the Chapter 11 cases.

The company said the 140 retained employees earn a total base salary of $15.5 million. With the addition of the 480 new employees, Lehman said the total base salary would be increased to roughly $96 million during the wind-down period.

The employees will also be eligible for a bonus, subject to specified restrictions, and Lehman estimates that the bonuses will not exceed $110 million.

Employees who are involuntarily terminated will be entitled to receive their share of the earned bonus and up to $22.5 million of severance benefits. Employees who voluntarily terminate their services before the end of their commitment period will not be eligible to earn a bonus or receive severance.

Initial commitment periods will range from three months to 24 months, according to the motion.

A hearing is scheduled for Nov. 18.

New York-based Lehman Brothers Holdings is the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15. Its Chapter 11 case number is 08-13555.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.