Subscribe to this blog's feedDoubt over whether Lehman's deleveraging is really all it seems in this interesting Bloomberg article (via Yves Smith):
So what does Lehman do? It sells billions of dollars of assets to a newly formed hedge fund [R3] that:
1) counts Lehman as a significant investor;
2) is run by seven recently departed Lehman executives;
3) is operating out of Lehman's office space, three floors down from the office of Lehman's corporate secretary.
You don't need to know much more about Lehman's transactions with the fund, R3 Capital Partners, to see the problem...
Read the whole article - Smith adds
Two other factoids: one reader said that R3 is Lehman's internal designation for restricted stock. The Bloomberg article that ran earlier said that Lehman would get upside benefit if the assets sold to R3 did well. That of course could simply be a general statement that would pertain to any investor, or could refer to arrangements between Lehman and the fund regarding those assets.Our source, who proved largely accurate on other details regarding the hedge funds, also said R3 employees who departed Lehman would continue vesting any Lehman restricted stock they held. If true, that is a highly unusual arrangement.
Comments (2)
Please post your sources next time, like the articles, por favor. Thank you.
Posted by John Doe | July 4, 2008 3:08 AM
Posted on July 4, 2008 03:08
Sources added - sorry about that
Posted by Alexander Campbell | July 4, 2008 4:14 PM
Posted on July 4, 2008 16:14