We’ve got some good news and bad news for former Lehman Brothers employees. Some of you are set to receive big bonuses. Others are getting your severance cut off.
If you were one of the top money managers working in the part of the business bought by Bain Capital and Hellman & Friedman, you get the good news: your new owners have set aside $400 million for retention bonuses. This still needs to be approved by the bankruptcy judge.
Some laid-off Lehmanites are getting the bad news: severance is being cut-off as of Friday. And as if that wasn’t bad enough, Lehman is also not going to pay a portion of the costs of former employees health insurance.
“Lehman Brothers is unfortunately no longer able to provide the salary continuation or other payments described in your separation agreement,” Lehman told employees in a letter obtained by Bloomberg. “As a result you will not receive a payment on Oct. 3 or after.”
Bloomberg provides some additional details:
One person who worked for Lehman for 12 years and who declined to be identified because of a confidentiality agreement said the firm had reneged on its promise to pay monthly severance checks until August 2009. It isn’t clear how many ex- Lehman employees are affected by the decision. Lehman spokesman Hugh Burns wasn’t immediately available for comment.
Workers who lost their severance may be able to seek the remainder of the payments by filing claims with the bankruptcy court overseeing Lehman’s case in New York, according to the letter. A deadline to file the claims hasn’t been set, the letter said.
Health benefits that are part of the severance agreement will continue, though Lehman no longer will pay a portion of the cost, according to the letter. The former employees will receive monthly bills, the letter said.