Lehman Said to Prepare Bankruptcy as Buyers Withdraw

Source: Bloomberg:

Lehman Brothers Holdings Inc. prepared to file for bankruptcy after Barclays Plc and Bank of America Corp. abandoned talks to buy the U.S. securities firm and Wall Street prepared for its possible liquidation.

A former Lehmans employee leaves with his new house.

Lehman and its lawyers are getting ready to file the documents for bankruptcy protection tonight, said a person with direct knowledge of the firm’s plans. A final decision hasn’t been made, though none of the other options being considered appeared likely, the person said, declining to be identified because the discussions haven’t been made public.

The best case is that the Fed offers a 48-hour standstill by backing Lehman’s liquidity directly to win time for other bidders to come forth or the previously interested parties to reconsider,” said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania. “The worst case is bankruptcy, and Lehman goes down the tube.”

Unlike when the Fed committed $29 billion to help JPMorgan take over Bear Stearns Cos. in March, Lehman has access to a lending facility for brokers that would permit an orderly process for unwinding the firm.

Funny pictures extracted from a sad situation, over at the hilarious LOL-FED.