The sale of a majority interest in Lehman Brothers Holdings Inc.s investment management division, including Neuberger Berman, to a group of senior management was approved today by a U.S. Bankruptcy Court judge in New York, confirmed spokesman Randall Whitestone.
Under the deal, the Lehman estate gets 93% of $875 million in preferred equity, while the new owners of the one-time Lehman division, to be called Neuberger Investment Management, will get 7% of the preferred shares.
Neuberger management will control 51% while Lehman Brothers Holdings will retain 49% of the firm.
George Walker, global head of investment management for Lehman Brothers, will be CEO of the new firm, and Joe Amato, managing director and global head of asset management at Neuberger Berman, will serve as president of the firm, which had about $160 billion in assets as of Nov. 30.
Texas Teacher Retirement System, Austin, released a statement shortly after the ruling supporting Neuberger Investment Management, which will run $1 billion that had originally been awarded in April to Lehman Brothers as one of the $96 billion systems four strategic investment partners.
We are very confident that this new enterprise Neuberger Investment Management will best safeguard a continuing and highly valued strategic partnership with TRS, Texas CIO T. Britton Harris said in the release.
The PBGC had tried block the sale last week but withdrew its objection in court today. The Pension Benefit Guaranty Corp. had said 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, but PBGC spokesman Jeffrey Speicher said the sale terms were changed to acknowledge that Lehman Brothers will take responsibility for the pension obligations of its former division.