Lehman gets $850 million from Neuberger Berman preferred retirement

By Caroline Salls

Pittsburgh, March 16 - Lehman Brothers Holdings Inc. received $850 million from Neuberger Berman Group LLC in connection with the retirement of its entire outstanding preferred equity holding in Neuberger Berman, and the funds will be available for unsecured creditors when Lehman makes its initial distribution on April 17, according to a news release.

Lehman said it previously announced that, when completed, its monetization of the Neuberger Berman holdings will generate $1.5 billion in total proceeds, almost double what would have been generated by a competing offer received in 2008.

Combined with earlier proceeds, Lehman said it has now received more than $1 billion since completing this transaction, which represents the Lehman estate's largest monetization to date.

"This preferred share redemption is another important milestone in our continuing efforts to achieve maximum returns from our Neuberger Berman holdings," Lehman chief financial officer and Neuberger Berman director William J. Fox said in the release.

"Importantly, this transaction provides an immediate and significant recovery to Lehman's creditors, and we expect to provide additional value to creditors as Neuberger Berman moves toward 100% employee ownership over the next few years."

According to the release, Neuberger Berman expects to use excess cash flow and additional employee investments over the coming four to five years to retire the estate's remaining minority common interest in Neuberger Berman.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company emerged from bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on March 6.

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