Lehman wants to rehire 480 ex-employees: filing
NEW YORK (Reuters) - Lehman Brothers Holdings Inc (LEHMQ.PK) is looking to hire about 480 former employees to assist in winding down its business, according to court documents on Thursday.
Lehman said that during the first few weeks of its bankruptcy case it has been inundated with inquiries from traders, prime brokers, hedge funds, and others for information on their transactions, but its "current workforce is too small to manage this process without incurring unnecessary expenses and delay."
Barclays PLC (BARC.L), which bought the company's core U.S. assets last month, has continued the employment of more than 9,000 Lehman workers.
Barclays and Lehman have a transition services agreement whereby former employees of the investment bank will help it wind down its business. But Lehman said in court documents on Thursday that those employees are unable to devote the time and resources necessary to help Lehman wind-down its businesses.
Also if Barclays chooses to reduce the size of its work force acquired from Lehman, or the transition services agreement expires, Lehman said it would lose access to those employees.
"If the debtors and their advisors are going to preserve and maximize the value of the assets and transactions, they need employees who are dedicated and have an interest in preserving and maximizing values," Lehman said in the filing as it sought approval to hire the workers.
As of October 24, Lehman said its workforce was comprised of about 140 employees and a team of about 125 from restructuring firm Alvarez & Marsal. One of the firm's founders, Bryan Marsal, is serving as chief restructuring officer of Lehman.
Lehman said it needs to hire workers quickly to avoid the risk of losing information that would help it unwind thousands of complex derivative transactions. Lehman said it was seeking to hire former Lehman workers because the tasks to unwind the business require specialized knowledge.
At a hearing earlier this month, Lehman's lead bankruptcy attorney Harvey Miller warned the court that it may request higher payment schemes for these employees than bankruptcy courts are used to.
The "transactions involved necessitate the employment of individuals with very specific skill sets, and preferably, former Lehman employees who possess the expertise and experience necessary to efficiently administer and wind-down the Debtors' businesses and the subject transactions," Lehman said in court documents.
Lehman said the total base salary for 620 employees, including an additional 480, would increase to $96 million, and that the employees would be eligible to earn a bonus. It said the total amount of bonuses to be issued would not exceed $110 million. It also asked for approval to set aside severance benefits of $22.5 million for employees that are involuntarily let go.
It said employment contracts would have initial commitment periods ranging from three to 24 months.
(Reporting by Emily Chasan)
