Drexel Considers Selling Units, Files British Bankruptcy Petitions With AM-Drexel, Bjt
LONDON (AP) _ Drexel Burnham Lambert Group Inc.’s British units took steps Friday to wind down their operations following the U.S. parent company’s bankruptcy petition Tuesday.
Drexel officials were talking with various parties over the possibility of selling the British operations in pieces, a company official said.
Meanwhile, KPMG Peat Marwick McLintock, the British arm of the international accounting firm, on Friday was appointed by Britain’s High Court as administrator of Drexel Burnham Lambert Holding Ltd., a holding company for most of the London operations.
It also was appointed administrator for two units, Drexel Burnham Lambert Ltd., its metals, soft commodities and oil futures trading arm, and Drexel Burnham Lambert Securities Ltd.
These three companies filed petitions with the bankruptcy section of the High Court earlier Friday.
In filing the administrative petitions, Drexel essentially sought the court’s guidance in ascribing priorities to creditors or claimants against its operations.
Peat Marwick said its job would be ″to ensure that all commitments″ with the three Drexel units ″are honored in full″ and that Drexel’s clients are ″totally unaffected by events occurring in other parts of the group.″
James Furlong, a Drexel senior vice president in charge of European-based equities trading, said his division was in talks with three major institutions about the possibility of the division’s sale.
He said he had no doubt that the staff would stay together.
Furlong’s staff of 60 trades in U.S. stocks and related products. Drexel’s non-U.S. stock trading business was curtailed last year.
The heads of Drexel’s several European-based operations held discussions in London for much of Friday, Furlong said. Strategies emerging from the meetings suggest the divisions will attempt to market themselves individually to prospective buyers, he said.
For equities, the first option was to find a buyer for the whole of the equities business outside the United States, comprising both European and Asian operations with a total staff of 300, he said.
The second option was to find a buyer for the European sales staff alone. Furlong said that three institutions so far have shown interest in this plan.
There so far have been no resignations or defections from the European team and morale was good, Furlong said.
On Thursday, the Bank of England announced a special settlements arrangement for foreign exchange trades involving Drexel in London to prevent liquidity problems.
Also Thursday, the London Clearing House, which is responsible for clearing operations on the London Metal Exchange, International Petroleum Exchange and several other markets, declared Drexel in default of all its commodities futures business.