The PBGC is seeking to block the management buyout of Lehman Brothers Holdings Inc.s investment management division by managers at Neuberger Berman, according to court documents.
The Pension Benefit Guaranty Corp. filed the objection Wednesday in U.S. Bankruptcy Court in New York, which is overseeing the Chapter 11 reorganization of Lehman Brothers.
The agency claims that the sale agreement would allow most of Lehmans investment management division to be transferred free and clear of any pension obligations, according to court documents. The PBGC wants to negotiate with parties involved in the sale so the pension obligations are resolved before bankruptcy proceedings progress.
On Dec. 12, the agency filed papers with the same court to seek the termination of the Lehman Brothers Holdings Inc. Retirement Plan, which the agency estimated was 95% funded with $898.2 million in assets to cover $940.8 million in liabilities. U.S. Bankruptcy Court Judge James Peck is overseeing the bankruptcy proceedings.
This is an item that the Lehman Estate is working on directly with PBGC. We have been aware of it and do not anticipate it will interfere with managements announced acquisition of Neuberger, said a spokesman for Neuberger Investment Management in a statement. The firm is seeking to acquire a majority of Lehmans investment management division.A bankruptcy hearing on the sale of the companys investment management business subsidiaries is scheduled for Dec. 22.