Lehman's Survival Plan: Sell Assets

New York, NY (AHN) - After failing to raise fresh capital from investors; Lehman Brothers is planning to sell a large piece of its investment management business and spin-off its commercial real estate assets in an attempt to turnaround the company.

The invest bank also plans to cut its divided by 93 percent in order to save cash as it struggles to cope with a $4 billion loss in the third quarter. The company has lost roughly $6.5 billion so far this year.

The spin-off will essentially rid Lehman of $25 to $30 billion of its commercial real estate portfolio, which is the main problem child of their balance sheet. The spin-off is expected to close in the first quarter and will create a separate publicly traded company called Real Estate Investments Global.

Lehman plans to sell 55 percent of its investment management business at auction. The sale is estimated to have a $3 billion direct benefit to their books.

"If anybody came with an attractive proposition that was compelling for shareholder value, it would be brought to the board, discussed with the board, and evaluated," CEO Richard Fuld told investors on a conference call, according to the Associated Press. "We remain committed to examining all strategic alternatives to maximize shareholder value."

Shares of Lehman gained some traction as shares fell just 7 percent on Wednesday after dropping 45 percent in the prior session.