US trustee objects to Lehman's hiring of Gleacher for Archstone deal

Dec 12 (Reuters) - Lehman Brothers Holdings Inc's unsecured creditors and a trustee questioned the bankrupt broker-dealer's move to hire Gleacher & Co as a financial adviser for an Archstone deal, as the company already has an adviser in place for any deal.

Lehman, which already owns 47 percent of Archstone, is looking to buy another 26.5 percent in the apartment owner, according to a report.

The U.S. trustee, Tracy Hope Davis, said though Lehman Brothers wanted to hire Gleacher for its "expertise in private equity and public offerings," it did not specify why Lazard, which is being paid $55 million, could not perform the same task.

Lehman cited the hiring of two financial advisers, Miller Buckfire and UBS Securities, in the General Growth bankruptcy case as a precedent in its application.

However, the trustee pointed out that Miller Buckfire was not licensed to do the work that UBS was retained to do and had also agreed to a reduction in its fees.

Lazard will receive its fees, without a reduction, regardless of whether Gleacher is responsible for the Archstone transaction.

According to Lehman's application, Gleacher has been actively involved in a potential Archstone transaction since Feb. 17 without a formal engagement in place.

Lehman's unsecured creditors had originally objected to the bank hiring Gleacher for an Archstone transaction for the same reason.

The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.