Lehman seeks to sell Bermuda reinsurance arm for $14m
Lehman Brothers is looking to sell its Bermuda reinsurance arm for $14 million.
The Bermuda unit is seeking bankruptcy court approval to close on the sale of Congress Life Insurance as a part of the wind-down of Lehman Re Ltd, which is being overseen by the Bermuda courts. It is one of many loose ends yet to be tied up for the failed investment bank.
Court records indicate Tennessee Farmers Life Insurance Co, the buyer in the deal, wants the US Bankruptcy Court of Manhattan to approve the deal to ensure none of Lehman’s liabilities haunt them.
The Lehman reinsurance division bought Congress Life from an affiliate of JP Morgan Chase & Co. in 2007 for about $9.1 million. It provided $50 million in capital to Congress Life, which was supposed to strengthen Lehman’s reinsurance business.
Congress Life is one of the assets caught up in Lehman’s battle with Magnetar Capital’s Pulsar Re Ltd a court fight that continues in Bermuda. The proceeds of the sale, plus an additional $45 million used to capitalised Congress Life, will be held in a segregated account until there is a ruling or settlement in the dispute.
Pulsar Re claims Lehman used Pulsar’s money to buy and capitalise Congress Life. It has agreed to let the sale go through.
A Bermuda court is scheduled to review the deal before the Manhattan bankruptcy court takes it up in early April.
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