BOFA, JC Flowers, China Poised To Cart Away Lehman Wreckage

Now that Hank Paulson has told Lehman to take a hike, it’s anyone’s guess what a bid from this triumvirate might look like. But this time, even Lehman’s debtholders may get screwed.

As we knock off for the afternoon, Lehman is reportedly holed up in a conference room trying desperately to salvage a couple of dollars a share for its shareholders. Meanwhile, Bank of America and other possible bidders continue to lean on Hank Paulson for the support he’s said he won’t give.

And the Lehman clock continues to run…

FT: Bank of America, JC Flowers & Co, the financial investor, and China Investment Co, the Chinese sovereign wealth fund, are considering a possible joint bid for Lehman Brothers, the embattled Wall Street bank.

According to people familiar with the matter, the BofA-led group is among those examining a rescue of Lehman, which is racing to find a buyer after shareholders, creditors and counterparties gave a thumbs-down to its efforts to survive as an independent entity. Barclays, the UK bank, is also interested…

While the details of any proposal haven’t yet been fully worked out, a bid from the BofA-led group may involve losses for holders of the debt as well as shareholders. That would be a dramatic departure from recent deals where holders of debt were saved even as shareholders suffered heavy losses.

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