Barclays To Buy Lehman Banking Divisions

British Bank Strikes Deal For $250 Million; Also Acquires NY Headquarters And 2 Data Centers For $1.5B

(CBS/AP)  Two days after walking away from a deal to purchase all of Lehman Brothers, Barclays PLC said Tuesday it had agreed to acquire Lehman's North American investment banking and capital markets businesses for $250 million in cash.

The British bank will also purchase Lehman's New York headquarters and its two data centers in New Jersey for $1.5 billion.

Lehman's parent company Lehman Brothers Holdings Inc.'s filed for bankruptcy protection on Monday after it was unable to find financing or fresh capital to shore up its balance sheet amid a continued downturn in the credit markets.

The deals require approval from the bankruptcy court.

Also on Tuesday, the U.S. government announced an $85 billion emergency loan to rescue insurance giant AIG in an effort to avoid further economic turmoil - a move they were not prepared to make in Lehman's case.

Barclays said it will acquire Lehman's North American banking operations, which include fixed income and equities sales, trading and research and investment banking business. The deal throws a lifeline to about 10,000 employees working in the divisions.

Barclays and Lehman reached the agreement hours after Lehman's first bankruptcy hearing in a crowded courtroom at the U.S. bankruptcy court in Manhattan, just steps away from Wall Street's iconic bull statue.

JPMorgan advanced Lehman $87 billion when the market opened Monday, acting in part on a request by the Federal Reserve Bank of New York. The New York Fed later repaid JPMorgan that amount. On Tuesday, JPMorgan advanced another $51 billion.

Shai Waisman, a lawyer for Weil, Gotshal & Manges, LLP representing Lehman Brothers, in his opening statement argued that Lehman's Brothers' downfall was the result of a "chain reaction" of events that were largely out of the investment bank's control.

"Lehman operated in an extremely unfavorable business environment," Waisman said, referring to declining asset values and low levels of liquidity.

Judge James Peck approved a motion that JPMorgan Chase & Co. will remain Lehman's clearing house through the bankruptcy proceedings. The issue arose over the past two days, when JPMorgan made the advances to Lehman to allow it to keep trading and "avoid a disruption of the financial markets," according to court filings.

Also on Tuesday, the House Oversight and Government Reform committee said it would hold a hearing Sept. 25 to examine the "regulatory mistakes and financial excesses" that led to Lehman's bankruptcy filing. It asked Lehman Chief Executive Richard Fuld to testify before the committee.

[moorendrw]

References to The Barclay Family are confused. They have nothing to do with Barclays Bank plc.

Speaking as a Brit working in the City of London I don''t think you have any thing to fear. No plot just maximising profit, that''s all - which I imagine helps out all of those poor employees left jobless by the collapse of Lehman.

[moorendrw]

References to The Barclay Family are confused. They have nothing to do with Barclays Bank plc.

Speaking as a Brit working in the City of London I don''t think you have any thing to fear. No plot just maximising profit, that''s all - which I imagine helps out all of those poor employees left jobless by the collapse of Lehman.

[moorendrw]

References to The Barclay Family are confused. They have nothing to do with Barclays Bank plc.

Speaking as a Brit working in the City of London I don''t think you have any thing to fear. No plot just maximising profit, that''s all - which I imagine helps out all of those poor employees left jobless by the collapse of Lehman.

[whitemale08]

The Barclay family is one of 12 founding members that make up the Federal Reserve System. Imagine that, foreigners from England controlling our currency and banking system like the Rockerfellers.

Watch Money Masters then go to larouchepac.com

The only education you must have to know who and how is running the world.

[whitemale08]

The British East India Company is "officially" taking over what was already theirs and that is the Global Financial System.

Soon "serfdom" will be official and regional currencies will be constructed such as the Amero all under one global government controlling a world wide police stated as a "puppet" directed from the "City of London".

[lewiston14]

Is this part of the No CEO or EXECTUIVE left behind act passed a few years ago? Any way what is a New York Fed I thought the Fed was the Fed as in the whole country. You mean we have sub Feds to?

[brianbwb-2009]

Posted by DonLB

As if that were not enough, Morgan Stanley, Citibank, Chase, and Smith Barney are next.

[donlb-2009]

I have one more comment to make. With at $223 billion bailout and counting, how are we going to pay our soldiers in Iraq? In one day we just spend all the money that the Iraq War costs for 2 years. If it goes any higher, we will not have the money to bring the soldiers home. Please think about this for a moment.

[donlb-2009]

How much will this fiasco cost the American taxpayer?? Let us add it up. $85 billion to AIG, $87 billion to JP Morgan for payment number one, and another $51 billion to JP Morgan which we will probably have repay. What does it add up to?? $223 billion or a quarter of $1 trillion. There goes univeral health care for the rest of us. It is indeed socialism for the rich and capitalism for the poor. When will things change? When will people of this country wake up? I have no idea.

[martin9p2]

It would be a mistake for the House Oversight and Government Reform committee to examine "regulatory mistakes" without also examining Wallstreet greed in general and predatory banking behavior at Lehman in particular.