Lehman Brothers seeks court approval of bid procedures for $2.15 billion investment management sale

By Jennifer Lanning Drey

Portland, Ore., Oct. 6 - Lehman Brothers Holdings Inc. requested court approval of the bidding procedures related to the proposed $2.15 billion sale of portions of its investment management division to joint private investment funds sponsored by Bain Capital Partners, LLC and Hellman & Friedman, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Under the proposed purchase agreement, the funds would acquire the Neuberger Berman business, the fixed income business, parts of the hedge fund of funds and single manager businesses, the private funds investment group of the private equity business and assets related to the Asian and European asset management businesses.

Lehman will pay the Bain/Hellman venture a $70 million termination fee and up to $35 million if Bain/Hellman is not the high bidder at auction or if the sale is not consummated by June 30, 2009.

At auction, overbids must be at least $50 million more than the Bain/Hellman bid plus the termination fee.

Incremental overbids must be at least $25 million over the subsequent bid.

The company has proposed that the auction be held 61 days after entry of an order approving the bidding procedures.

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.

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