On October 28, the House Committee on Oversight and Government Reform, chaired by Rep. Henry Waxman (D. Cal.), sent a letter to the nine major banks which are the recipients of Treasury’s $125 billion investment seeking broad ranging compensation information on all personnel, including total compensation and average compensation paid or projected to be paid from 2006-2008, as well as the number of employees paid more than $500,000 and individual salary and bonus breakdowns for the ten highest paid employees. The letter states that the committee “questions the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of bonuses”. For more information about this ongoing investigation, contact Mike Delikat, Adam Goldberg, Mike Madigan or Howard Altarescu.
Barclays announced today plans to raise up to £7.3 billion, without government aid, from existing and new investors as part of its plan to achieve the new higher capital targets set by the UK Financial Services Authority. Barclays Press Release.
On October 22, the Bankruptcy Court for the Southern District of New York approved bidding procedures to auction Lehman Brothers Holdings Inc.’s Investment Management Division (including Neuberger Berman) and a portion of its private equity business. The proposed purchaser is IMD Parent LLC (jointly controlled by Bain Capital Partners and Hellman & Friedman), which is entitled to certain break up fees and expense reimbursement in the event they are not the winning bidder. The estimated net purchase price is $1.75 billion. Bids are due on December 1with an auction for qualified bidders scheduled to occur on December 3. The sale hearing is scheduled for December 22. Orrick Client Alert.
Orrick’s Creditors’ Rights & Bankruptcy Group has prepared a user’s guide to investments held in distressed financial institutions and broker-dealers, which summarizes the current investment landscape. Investments Held in Distressed Financial Institutions and Stockbrokers: A User’s Guide.