Two Lehman Brothers Units Need Help to Avoid Failing

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Two Lehman Brothers Units Need Capital to Avoid Failing Lehman Brothers Holdings, the formerly great Wall Street firm that went bankrupt at the height of the financial crisis, now says it will have to pour hundreds of millions of dollars in capital into two of its struggling units if it is to prevent them from undergoing failures that could cost the investment bank billions, CNBC reports, according to court documents.

Meanwhile, the Financial Crisis Inquiry Commission continues to piece together the events that led up to the financial industry meltdown. On Wednesday, it heard testimony from former Lehman Chairman and CEO Richard Fuld, who blamed the government for refusing to rescue the investment bank, even though it rescued many other financial institutions later, and for mandating that the firm file for bankruptcy. Lehman filed for Chapter 11 protection on Sept. 15, 2008, the largest such filing in history. Today, the company's difficulties continue.

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The two struggling Lehman units are Aurora Bank FSB, formerly known as Lehman Brothers Bank, and Woodlands Commercial Bank. Both are suffering under restrictions from regulators that have limited their ability to raise capital, complicating Lehman's efforts to sell them.

In a filing with a U.S. bankruptcy court on Wednesday, Lehman said it was faced with a choice of either allowing the units to fail, which would result in estimated losses of between $1.2 billion and $3.6 billion, or injecting capital into their balance sheets to recover significant value for its creditors.
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