Municipal Bond Forum
Lehman Brothers
Q
Do you think Lehman Brothers will survive its present problems? What is its responsibility to the bondholders in case of a sale of the company? Will the bondholders eventually be made whole? Is there any protection in case of a default by Lehman?
A
James A. Klotz responds:
We really can’t comment on Lehman’s financial condition. We are as much in the dark as the rest of the financial community. We believe that a sale of Lehman would have a supportive effect on the Main Street bonds (S&P has commented that a sale to a strong institution might even result in an upgrade). Naturally, we would welcome this outcome. A bankruptcy filing by Lehman would certainly have a negative impact on these bonds, but we really don’t know to what extent.
We will try to keep our investors informed as events unfold.
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