Lehman Brothers Holdings Inc.'s sale of half of its investment management division to executives from Neuberger Berman, which is part of the business, will be an all-stock transaction valued at more than $1 billion.

The Neuberger managers are to pay $813.8 million in newly issued preferred shares, plus common stock representing a 49% stake in the business, Lehman said Tuesday in a filing in U.S. Bankruptcy Court in New York. The value of the deal exceeds $1 billion, according to people close to Neuberger who declined to be identified.

The buyers would own 51% of the new company, Lehman said in court papers.

Analysts put the value of the money management business at up to $7 billion this year, before market declines eroded its assets. As a result of the stock transaction, Lehman creditors will have to wait for a payoff.

"The only thing harder to sell than a people business today is a people business in the financial industry," said Martin Bienenstock, who heads the restructuring group at the law firm Dewey & LeBoeuf. "Neuberger is both. Management clearly had the opportunity of a lifetime to acquire the company for stock. If management can hold the company together, it would appear the future for the stock value has to be brighter than today."

Lehman, after filing the biggest U.S. bankruptcy on Sept. 15, is selling assets to pay creditors.

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