Lehman status-Sunday afternoon

Barclay's walking away

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/mon…

http://www.nytimes.com/2008/09/14/business/14lehman.html?hp

http://www.cnbc.com/id/26704405

BOA still involved

Just spoke off-record to someone working in the M&A team at one of the banks advising BofA; said BofA currently unlikely to go ahead with full acquisition for similar reason to BARC - unable to guarantee all the credit losses etc won't blow up tomorrow. Seriously think its going to go under in next 24hrs now.

=== 23yr old Associate

He just rang saying they're drafting a LEH Chapter-11 bankruptcy filing. I kid you guys not.

=== 23yr old Associate

I believe you--they have been working on the paperwork for a couple of days. I keep waiting for Paulson to call chicken first.

This situation is now becoming extremely critical given the fact that foreign markets open tonight. If a deal is not reached by tonight we could quite possibly see Lehman go bankrupt by end of trading in New York on Monday.

http://www.isda.org/

ISDA confirms a netting trading session is taking place between 2 pm and 4 pm New York time today for OTC derivatives. Product classes involved are credit, equity, rates, FX and commodity derivatives. The purpose of this session is to reduce risk associated with a potential Lehman Brothers Holding Inc. bankruptcy filing. Trades are contingent on a bankruptcy filing at or before 11:59 pm New York time, Sunday, September 14, 2008. If there is no filing, the trades cease to exist. These trades are subject to a protocol which is being distributed by ISDA (International Swaps and Derivatives Association). Traders should execute the protocol and return to Mark New at ISDA ([email protected]) with LEHMAN PROTOCOL in the subject line.

Assuming this information is correct and not speculation in the least, are you sure it's chapter 11? I could swear that banks could not file for Ch. 11, but chapter 7 due to liquiditation means on assets when paying creditors.

Fuld must be beside himself. Going from 650 on paper to 14 on friday to ?? at midnight. Amazing and so disheartning to watch this unfold for all involved. 158 year old company. Shit. Not a pretty sight tomorrow.

According to the NY Times The Lehman Holding company can file Ch 11

But the arguement against chapter 11 is the liquidity play. Derviatives being exempt and all, unless the street agrees to do business with Lehman while they are in Chapter 11 and honor counterparty trading, you will be looking at everyone trying to liquidate positions with Lehman, implying Chapter 7. Either way, Monday is just going to be a very down day. I would not be shocked if we saw at least 1 trading barrier broken on monday and had a minimum of a half hour of stoppage.