P.M. BRIEFING : Drexel Asks Judge to Allow Its Executives to Sell Off Assets
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NEW YORK — Drexel Burnham Lambert Group Inc. lawyers asked a bankruptcy judge today to allow three top Drexel executives, rather than a court-appointed examiner, to manage the liquidation of the securities firm.
The move came as Drexel’s creditors met to form a committee in the Chapter 11 bankruptcy proceedings for the parent of the Wall Street firm, which collapsed this month in a cash crisis after unrivaled success in the 1980s.
Drexel attorneys asked U.S. Bankruptcy Judge Harold Buschman III to give responsibility for selling assets of Drexel’s subsidiaries to the company’s three-member oversight committee, created last year as part of the firm’s federal securities fraud settlement.
Drexel Burnham Lambert Inc., the brokerage unit, and other subsidiaries have been liquidating their multibillion-dollar securities portfolios and other assets since the parent filed for bankruptcy protection from creditors on Feb. 13.
The subsidiaries are not in Chapter 11 and therefore do not have to report asset sales and other activity to the judge. But Drexel’s top unsecured creditors have questioned the rapid disbursement of assets and other payments, including $260 million in cash and stock bonuses paid late last year.
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