Lehman seeks buyers for some units

— -- Lehman Bros. sought buyers for some of its divisions Monday after the nation's fourth-largest investment bank filed for bankruptcy court protection in the largest Chapter 11 case in history.

Regulators, other financial firms, investors and Lehman's more than 25,000 employees meanwhile scrambled to limit the financial fallout and assess the demise of the 158-year-old financial giant.

Lehman listed assets of roughly $639 billion in its bankruptcy filing in New York. The company also listed $613 billion in debts. Lehman owes more than $157 billion to its 10 largest unsecured creditors, chiefly U.S. and Japanese banks.

Shares of Lehman plummeted $3.44, or 94%, to 21 cents a share, on Monday.

Financial and credit market instability linked to the national real estate market drop "created significant liquidity problems," Lehman CFO Ian Lowitt said in a bankruptcy affidavit.

Lehman said it was exploring the sale of its broker-dealer operations, the heart of the firm. Several potential buyers are discussing the firm's investment management division, the company said.

Private-equity firms are among the likely buyers, said Fred Cannon, a research analyst for Keefe Bruyette & Woods. Banks that passed on buying Lehman outright might bid for divisions, he said.

Regulators assured Lehman brokerage customers their accounts were protected and would be transferred to other firms. As of March, Lehman's investment management division had roughly $277 billion in assets under management, according to a Securities and Exchange Commission filing.

The SEC said its staffers would remain on-site at Lehman to oversee an orderly transfer of accounts to brokerages insured by the federal Securities Investor Protection Corp.

SIPC President Stephen Harbeck said it was "unlikely" any liquidation procedure would be initiated against Lehman's brokerage division.

Although Lehman had been a significant player in helping state and local governments issue bonds, other investment banks will fill any gaps, predicted Frank Chin, chairman of the Municipal Securities Rulemaking Board.

Chin and New York City Mayor Michael Bloomberg said they expected financial expertise and longstanding client relationships would enable many of Lehman's employees to land new jobs.

But a Lehman memo gave few assurances. Referring to salaries, the memo, which was provided to USA TODAY, said Lehman "is working to ensure payment of payroll in the ordinary course."