Lehman Brothers Financial SA (LEHNQ)

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LAMCO Holdings LLC & LAMCO LLC For the benefit of all LBHI stakeholders.
LAMCO



During the Chapter 11 Cases, LBHI has developed a team of approximately 450 individuals (including 70 A&M employees), spread across LBHI’s information technology infrastructure and five distinct asset classes (commercial real estate, residential mortgages, private equity and principal investments, corporate loans and derivatives) to manage and wind-down the Debtors’ assets effectively. LBHI developed, by necessity, an infrastructure for the long-term management of the Debtors’ long-term investments and assets and LBHI’s asset management teams developed the skills required, and an expertise and knowledge base specifically geared to, the management of such long-term investments and distressed assets.



The Debtors have determined that the capabilities of LBHI’s asset management team are scalable and thus easily transferable to the management of other long-term investment assets for third parties as well. In the course of managing and administering such assets, LBHI has built a going-concern asset management business that may be of substantial value, with capabilities that may endure beyond the administration of the Chapter 11 Cases, and generate revenues. In order to maximize the value of the asset management business, LBHI intends to organize a new separate but wholly owned subsidiary to provide management services to the Debtors and, potentially, to third parties. LBHI has therefore established LAMCO Holdings LLC, and its wholly owned subsidiary, LAMCO LLC (together, “LAMCO”) to provide legacy asset management and administration services to the Debtors and, subject to certain restrictions and approvals, third parties. Upon Bankruptcy Court approval, the Debtors intend to transfer to LAMCO a majority of LBHI’s asset management employees and certain infrastructure.

In addition to maximizing the value of LBHI’s asset management business, LAMCO will aid the Debtors’ employee retention efforts – especially to the extent that LAMCO is able to attract third party business – by offering the potential for long-term employment to the individuals whose skills and knowledge are essential to the successful management of the Debtors’ assets. In turn, the direct costs of recruiting and training new employees should be reduced, and indirect costs and investment losses associated with turnover and loss of asset- and portfolio-specific knowledge should also be stemmed.



LAMCO will serve as a centralized asset management platform for a significant portion of the Debtors’ assets. Although LAMCO Holdings and LAMCO LLC will be non-debtor entities, they will be subject to certain restrictions that will afford the Bankruptcy Court and the Debtors’ creditors a substantial degree of oversight and control. First, LAMCO Holdings will be required to seek Bankruptcy Court or Creditors’ Committee approval of any acts for which LBHI would currently require Bankruptcy Court or Creditors’ Committee approval, as applicable. Second, LAMCO Holdings and LBHI have agreed to be governed by certain restrictions, and to grant the Creditors’ Committee certain rights, over their going-forward operations and key corporate decisions, including compensation of directors, officers, and employees, the nature and extent of any third party contracts and the issuance of any equity or equity-derivative interest in LAMCO.



The Debtors expect that LAMCO will be able to enter into agreements to manage assets of third parties for a profit that would inure to LBHI’s benefit, as an equity holder of LAMCO, and ultimately to the benefit of all of the stakeholders in the Debtors. In addition, LBHI, with the assistance of Lazard, is in the process of exploring a strategic relationship with a third party with respect to LAMCO, including the possibility of selling an equity stake in LAMCO to a potential partner, or otherwise entering into mutually beneficial ventures and arrangements with third parties.



The Debtors have not yet received authority from the Bankruptcy Court to permit LAMCO to manage their assets. The Debtors filed a motion with the Bankruptcy Court on March 15, 2010, seeking approval to enter into an asset management agreement (and related agreements) with LAMCO for the purposes discussed in this section. The motion is scheduled for a hearing before the Bankruptcy Court on April 15, 2010.

Read more: http://getfilings.com/sec-filings/100416/LEHMAN-BROTHERS-HOLDINGS-INC_8-K/a10-8193_2ex99d1.htm#ixzz4S0sgsSgj