Lehman to sell knick-knacks to pay off debt.
March 20 (Bloomberg) -- Lehman Brothers Holdings Inc. has negotiated the return of thousands of Lehman-logoed knickknacks that were mistakenly transferred to Barclays Plc through the sale of the bankrupt securities firm’s brokerage unit.
Tote bags, umbrellas, stress balls, Tiffany paperweights and other items now stored in closets and warehouses from New York to Chicago will be returned to Lehman and sold to pay creditors, according to a court filing yesterday. Lehman filed the largest bankruptcy in U.S. history in September and has about $200 billion in unsecured liabilities left to pay, Chief Executive Officer Bryan Marsal said Jan. 28.
As part of the arrangement, Lehman is barred from trying to sell the objects to Barclays’ employees, according to court papers. The investment bank may need a liquidator to move the logoed goods, which would fetch “a discount to their intrinsic value,” said Richard Kaye, chief marketing officer at Hilco Trading, which values and sells assets for companies, in a phone interview.
“A golf ball plays the same way no matter what it says on it,” said Kaye, who might offer Hilco’s services to Lehman, he said. “But does someone want to walk around with a logoed Lehman umbrella?”
Barclays, the third-biggest U.K. bank by assets, paid $1.75 billion for Lehman’s North American brokerage and real estate in September after Lehman went bankrupt with assets of $639 billion. Lehman said on March 10 its cash rose to $6.8 billion by Jan. 31.
Novelty Value
Companies often accumulate silver objects, pens and T- shirts with logos to give to guests at conferences and parties, or to sell to employees. They have “novelty value,” rather than “historic value” that attaches to coins or vintage posters, said Steve Ivy, chief executive officer of Dallas-based Heritage Auction Galleries.
Lehman could resort to the Internet to move the “trinkets,” which are more likely to appeal to former Lehman employees than to collectors, he said.
“EBay might be the best place to sell the merchandise,” Ivy said in a phone interview.
Hilco’s Kaye said a liquidator might charge a commission or fee for selling the merchandise, or might buy it all and try to resell it. He hasn’t seen any other banks getting rid of their trinkets as a result of the credit crisis, he said.
Barclays Rights
Lehman spokeswoman Kimberly Macleod wouldn’t say how Lehman plans to sell the objects and Barclays spokesman Seth Martin declined to comment. London-based Barclays is retaining the rights to all logos and trademarks on the gift merchandise, according to court papers.
“The debtors and Barclays wish to resolve any dispute concerning ownership of the gift merchandise,” according to the filing in U.S. Bankruptcy Court in Manhattan.
Barclays acquired the trinkets as part of its purchase of the investment bank’s assets. Since the sale closed, attorneys for Lehman and Barclays have been disputing what belongs to Barclays.
A hearing on the settlement over the trinkets’ ownership is scheduled for April 8. Under the agreement, Lehman will repay Barclays $33,880 for warehouse costs.
Mugs, Pens, Cufflinks
Items in storage include: 1,630 green canvas duffle bags with Lehman ribbon, 353 green compact golf umbrellas, 75 Waterford Marquis Treviso crystal clocks, 682 white Lehman coffee mugs, 130 Swiss Army pens, an English beechwood-lined sterling silver box from 1902, 200 Lehman conference pens, 12 pairs of Links of London cufflinks, 24 Screwpull wine openers inscribed “LB,’ 24 Titleist PRO VI golf balls inscribed ‘‘LB,’’ 30 girl Teddy Bears, 18 large, ivory womens’ F&G stretch snap shirts and one Tiffany shooting star.
The case is In re Lehman Brothers Holdings Inc., 08- 13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Christopher Scinta in New York bankruptcy court at csinta@bloomberg.net. Linda Sandler in New York at lsandler@bloomberg.net.
Last Updated: March 20, 2009 11:57 EDT
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