Lehman mulls plan to give creditors stock - FT

NEW YORK, Feb 1 - Bankrupt Lehman Brothers Holdings Inc is considering a plan to put illiquid assets into two companies and give creditors stock in them instead of cash, the Financial Times reported on its website.

The plan would help the bankrupt investment bank wait for markets to improve so it can avoid a fire sale of assets that are difficult to sell amid the financial crisis, Bryan Marsal, co-head of Alvarez and Marsal, told the paper.

Marsal's firm is managing Lehman's liquidation.

The two standalone companies could be listed within two years, the paper reported, adding the plan was in preliminary stages.

One company would include the investment bank's real estate holdings, now valued at $43 billion, the paper said. The other would include private equity and proprietary investments.

Lehman may also seek approval for its industrial bank in Utah and thrift Lehman Brothers Bank to sell loss-making assets under the U.S. government's bailout plan, the paper said.

Lehman could not be immediately reached for comment.

Lehman, weighed down by bad assets, collapsed in September in the largest-ever U.S. bankruptcy after it was unable to find a buyer to come to its rescue.