Lehman Brothers asks for court approval of transition services agreement with Lehman Europe

By Jennifer Lanning Drey

Portland, Ore., Nov. 14 - Lehman Brothers Holdings Inc. requested court approval to enter into a transition services agreement with Lehman Brothers Europe Ltd. that the company said is necessary to unwind its European assets, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the filing, the formerly unified information system between Lehman and Lehman Europe ceased when the company filed for Chapter 11 bankruptcy. As a result, Lehman said it has been severed from employees, assets and services in Europe that remain critical to its operations and efforts to maximize the value of its estate.

Under the agreement, Lehman Europe and Lehman will continue to provide the services that were being provided between them during the period of Sept. 22, 2007 and Sept. 15, 2008.

Both parties will make employees available to each other for the benefit of the other party.

Additionally, each party may designate 30 employees as key employees and may not terminate those employees without the consent of the other party.

Lehman and Lehman Europe will continue to have access to information systems owned by the other party for a period of 24 months.

Throughout the period of the agreement, both parties have agreed to use all reasonable endeavors to provide each other appropriate service.

Lehman said the agreement is necessary because it holds a large book of business in the United Kingdom and cannot trade or evaluate its positions without the assistance of Lehman Europe.

Without the transition services agreement, critical personnel will be likely to depart Lehman Europe and take with them irreplaceable knowledge of Lehman's operations, Lehman said in the filing.

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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