Lehman Brothers Japan files for bankruptcy protection

TOKYO, Sept. 16 Kyodo - Lehman Brothers Japan Inc. filed for bankruptcy protection Tuesday with the Tokyo District Court following the collapse of its U.S. parent firm, marking the second-biggest corporate failure in the postwar period in Japan with the combined liabilities of the Japanese group totaling 3.43 trillion yen.

The Japanese unit of U.S. securities house Lehman Brothers Holdings Inc.,
together with its Japanese holding company, invoked the Civil Rehabilitation
Law.
The liabilities left by the Japanese group mark the second-largest corporate
failure in terms of debt in the postwar period in Japan, according to private
credit research agency Tokyo Shoko Research.
The move came after the fourth-largest U.S. securities house filed for
bankruptcy protection Monday in New York after bailout talks faltered over the
weekend.
''We decided it was best to file for civil rehabilitation in order to avoid a
grave impact on financial markets,'' Lehman Brothers Japan President Akio
Katsuragi said at a press conference in Tokyo.
Shortly after the filing, Japan's Financial Services Agency ordered Lehman
Brothers Japan to suspend operations for 12 days through Sept. 26 as the agency
received a report from the Japanese unit saying that it may fall into default
in the long run.
The FSA also ordered the unit to retain certain assets within Japan in order to
prevent Lehman assets from being transferred to other units and affiliates
outside of Japan as well as to protect investors in the country.
According to the FSA, the Japanese unit manages about 1.2 trillion yen worth of
assets, mainly for institutional investors.
Following the move, the Tokyo Stock Exchange said Tuesday morning that it will
suspend trading by Lehman Brothers Japan on the bourse from Tuesday for an
indefinite period of time.
The Finance Ministry also said it has decided to delist Lehman Brothers Japan
as a special market participant or primary dealer in the government bond market
for 11 days, starting Tuesday.
The U.S. investment bank opened a branch in Tokyo in 1986 and expanded its
business by taking stock orders for foreign investors and through bond market
profits.
The Japanese unit of Lehman came to prominence after providing 80 billion yen
to Japanese Internet service firm Livedoor Co. to help purchase Nippon
Broadcasting shares in 2005.
Market dealers said that the exit of Lehman, which exercised considerable
influence over the recommendation of brand stocks, will adversely affect not
only share prices but also trading volumes.
==Kyodo