Lehman Brothers press release letter dated September 15, 2008 (pdf).
September 14, 2008
CNBC also has learned that Bank of America has pulled out of negotiations to buy Lehman Brothers and has set its sights on Merrill Lynch. Merrill plans an internal (employee) announcement for 8 - 9 a.m. ET. to announce the possible merger with Bank of America.
The merger talks continue as this news breaks. Inside Merrill sources say price the merger price could be between $25 to $30 per Merrill share. But the situation is extremely fluid and this could easily change.
CNBC has confirmed press reports that Lehman Brothers is likely to file for bankruptcy protection as soon as Sunday evening.
Among details to be worked out: the accounting treatment for certain derivatives and repurchase positions, an area not currently covered by bankruptcy laws; and the orderly netting out of a variety of securities positions to which Lehman Brothers is contractually obligated.
Federal authorities are expected to be involved in the orderly disposition of
Lehman assets if such a filing occurs. Sources knowledgeable about the weekend deliberations tell CNBC that without some government participation in the process, a bankruptcy filing by Lehman Brothers would cause major disruptions in the financial system.
Officials at the Federal Reserve and U.S. Treasury are taking steps to mitigate risk to the system and assure the orderly functioning of the markets tomorrow.
According to the New York Times, Lehman will seek to place its parent company, Lehman Brothers Holdings, into bankruptcy protection, while its subsidiaries will remain solvent while the firm liquidates its holdings.
For immediate release — The Federal Reserve Board on Sunday announced several initiatives to provide additional support to financial markets, including enhancements to its existing liquidity facilities. — “In close collaboration with the Treasury and the Securities and Exchange Commission …
And this. Two more financial institutions in trouble:
A.I.G. Seeks $40 Billion in Fed Aid to Survive — The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night.
JPMorgan Chase & Co. in talks with Wash. Mutual
JPMorgan Chase & Co. is in "advanced talks" to buy Washington Mutual Inc., the biggest U.S. savings and loan firm, American Banker reported on Friday.
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