Lehman's Bankruptcy Process

" Back to money for breakfast this kind of a deal -- day and what else is there to talk about then then not a deal that forceful Lehman Brothers into bankruptcy. So with us this morning walk through the legalities. Of -- filing. It's Fox News is senior judicial analyst judge in union pilots had a good morning judge great to see you morning -- pushing the sun and better occasion here but. Look there are a lot of people who Leiter had pension funds like my mom at Lehman Brothers -- your money was managed by that. People want to understand this morning how does a bankruptcy. Work walk me through the process."

" Okay there are being there are many variables here but there are basically two to likely outcomes one is where they will file bankruptcy. And a federal judge will appoint a trustee. We'll line up all the creditors will line up all the debtors will gather all the assets. He'll sell the assets and the creditors will get X cents on the dollar. The other route is we will stay. Business. -- him consume them. They won't have to pay any bills and a federal judge will appoint a bankruptcy trustee and that personal recommend it to the judge what should be sold. What should stay in existence what's good what's bad what works what doesn't. It's enormous. Power. In the hands of a federal bankruptcy judge right here in lower Manhattan they could. Lehman Brothers could say we want to liquidate will want to go out of business and a federal judge could say no we're gonna put. This part out of business but we're gonna keep this part operating because this works. And this makes money and this will keep people like your mom from losing all of her investments. She may lose some."

" Okay great point because of his peers -- what we're hearing out of Lehman -- warning is the latter. Walk me through judicial authority because this morning that conundrum that everybody's trying to figure out -- understand here. Is what role does the Fed play what role does the treasury play what role does the FCC play. Or at the end of the day is as you talk about a trustee coming out of the court."

" You know its its soul all the powers in the hands of a single federal judge there's no jury in a bankruptcy case. But as a practical matter no judge could manage the bankruptcy. Of something as enormous as Lehman Brothers on harper his zone so the judge appointed trustee -- trustee is usually a banker or lawyer or company. That specializes. In gathering assets and recommending to the court what should be done with those assets the goal of the bankruptcy court. It's too soon. Innocent people from losing their investments is to save jobs. Is to stimulate the marketplace the court has almost un bridled authority to say what stays what goes what gets old and who gets to --"

" Okay talked to me about time duration some suggest that could take up to a year walk me through time. And then there have big corporations historically which have filed for chapter eleven and would come out of that if we're in different credit cycle six months from now. And they're still dealing with assets could this be. Lehman Brothers all over again standalone we're doing fine."

" There could be Lehman Brothers part two depending upon again. What can be sold and what is done with the money that comes in from that sale all of those decisions are decided by the federal judge this bankruptcy will probably take. Either a very short period of time because of financial Angel will combine without a financial Angel it'll take a couple of years to sort out who's -- what. And what can be -- look it's Lehman Brothers holding. They own so only things in some of which produced wonderfully. Many of which produced -- or are in the negative so the court will separate the good from the bad there may very wealthy. A -- stronger Lehman Brothers that through this before they almost went through bankruptcy when that Pete Peterson was we'll get."

" They've been hired four times four times they've been at the risk of failure at the time powers of the federal judge are enormous and he has a she has great flexibility. To salvage as much as possible and I won't happen overnight judge great pleasure having you want we know more than details of cool that. Trust deed that judges involved in this process talk about I want you talk about them and tell me how you think they'll shake it up you -- as always pleasure."