Lehman Brothers in bankruptcy or can be reborn

Wen/Dai

On a business trip, he has been studying Lehman's linked data and laws that come directly from the US. Because I majored in the undergraduate course is "investment and economic management", so, particularly want to write this article, on the purely professional field for discussion. Let's just say that this article has nothing to do with the company I'm going to go to (qunar.com).

Data Source:

L&http://www.aliyun.com/zixun/aggregation/37954.html ">nbsp; Orkin London Investment Co., Ltd.

• United States Federal Bankruptcy Act (US Bankruptcy Code)

In which law did Lehman Brothers apply for bankruptcy?

In the Chinese and English dictionaries, the meaning of bankruptcy is "end" or "end". Yes, everyone thinks so. But in the U.S. Federal Bankruptcy Act, chapters 7th and 11th are filed for bankruptcy protection. The difference is that the concept of liquidation in the 7th chapter is identical to the concept of liquidation in Chinese law. However, the 11th chapter of the application for bankruptcy protection is based on the concept of reconstruction, the legal interpretation is: does not mean that the liquidation of the company, the cessation of all commercial operations, does not mean that the company closed down. It is a reorganization procedure.

Lehman Brothers Holdings Inc., the Lbhi, is the bankruptcy protection filed under chapter 11th.

The Board's authorization to file for bankruptcy is to protect the company's assets and maximize its value. Because Lbhi filed a bankruptcy petition, he also submitted the Grace application permitted under chapter 11th of the insolvency law. This grace application will enable the company to continue operating in the normal way. This includes paying salaries to employees.

Ii. the relationship between Lbhi and its subsidiaries?

The bankruptcy petition for Lehman Brothers said: The application does not involve the various brokerage subsidiaries under its command, and any other subsidiaries. All brokerage subsidiaries will continue to operate, including clients of their wholly owned subsidiaries Neuberger Berman Holdings LLC, who will continue to use their respective accounts for trading or other operations.

Its IMD business group (Investment Management Division), a subsidiary of intermediate earnings, is a leading investment bank in China.

Lbhi is headquartered in New York and has regional headquarters in Tokyo and London, as well as offices in countless locations around the world. Real fluctuations, separations, layoffs, these are subordinate institutions.

Third, Lbhi what to do next?

After applying for bankruptcy protection under the US Federal Bankruptcy Act, Lehman Brothers, under the United States Department of Justice's "US managed Property Administration", which specializes in bankruptcy, will designate one or more committees to LBHI with Lehman Brothers on behalf of creditors and shareholder interests. The programme must be approved by creditors, bondholders and shareholders and approved by the court. Once the program or plan is approved, a more detailed tabular report called filed is required to be submitted to the Securities and Exchange Commission (SEC).

The main purpose of the restructuring plan: The Committee, comprising creditors and shareholders, to negotiate with Lehman Brothers. Or remove some of the company's debts or offer more conditions, such as debt swaps, to provide a breathing space for Lehman Brothers to stand up again.

Iv. future prospects?

All creditors and shareholders would be wiped out if they filed for bankruptcy protection under article 7th of the Bankruptcy Act. Now, in accordance with the 11th application, the creditor's lawsuit against Lehman is automatically postponed. Therefore, the reorganization is always more widely used than the liquidation.

Of course, in the process of bankruptcy and restructuring, bondholders will not get interest and principal, and shareholders will stop paying dividends. So it is not a big problem for CMB and Bank of China (Lehman Brothers bondholders), even if they do not make write-downs. The most is to replace the original bonds with new stocks (so-called debt swaps) or simply new bonds.

Many American companies, after the reorganization, have achieved great success, such as Continental Airlines. 1983-86 and 1990-93, after two bankruptcy restructurings, are now one of America's strongest airlines, earning the top 2 in the airline industry.

Therefore, "bankruptcy protection" + "reorganization", is considered to be a difficult company, is an effective strategy and strategy. Whether the Lehman Brothers were more competitive after the restructuring, let's wait and see.