Lehman stocks plummet as deal falters

NEW YORK, Sept. 9 (UPI) -- Shares of financial giant Lehman Brothers Holding plummeted Tuesday after a deal to raise capital from the Korean Development Bank failed, sources said.

Neither Lehman Brothers nor the KDB commented officially on the discussions, which have been under way for months, The New York Times reported.

But sources said the chances of a deal being struck were slim, dropping Lehman Brothers share value about 45 percent Tuesday.

Lehman Brothers has also been discussing the possibility of spinning off about $30 billion in risky loans in a good bank/bad bank strategy. Using this ploy, the stronger company that remained would support the so-called bad bank.

The firm has also pursued the sale of Neuberger Berman, a strong asset with a $6 billion asking price, the Times reported.

But, none of the deals have materialized, worrying investors.

"Clearly, the company does not believe that it has a serious balance sheet problem and it simply refuses to take what it believes are fire sale prices for its key assets," Richard Bove, an analyst at Ladenburg Thalmann wrote in a note to clients, the Times reported.