Roger Ehrenberg

Lehman Follows Good Bank/Bad Bank to Redemption

Squashnut, the question is: do you know what fraudulent conveyance is? That concept has nothing to do with what is going on here. What you are doing is taking a pool of illiquid assets, creating a liquid market for them, and allowing the more liquid assets to stop being taxed by the burdens associated with uncertainty surrounding the liquid pool. This isn't Marriott/Host Marriott where legacy bondholders were handed a sharp downgrade simply due to the restructuring. So I really don't understand your comment.

Richard, I didn't forget to tell you anything; I simply don't agree with your thesis. It's not as if the real estate assets are simply vanishing. Either existing shareholders will benefit from fresh cash being injected into Lehman, or they will receive another share of stock representing their proportionate ownership interest in the spun-out entity. My contention is that under either of these scenarios, an investor will be better off because of increased transparency associated with the core franchise and the ability to tap into a larger pool of investors for the real estate assets. So I don't actually see value destruction here - I see value creation.

Roger