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VeriFone Holdings Inc., a San Jose, Calif.-based point-of-sale terminal maker, says a financial plan it signed in June 2007 with a unit of Lehman Brothers Inc. is in jeopardy because of the New York-based investment bank's bankruptcy. In a U.S. Securities and Exchange Commission document filed Tuesday, VeriFone says it wants to end the deal with Lehman Derivatives and be reimbursed for associated losses in the convertible note hedge transaction. The transaction VeriFone had with Lehman Derivatives enabled VeriFone to raise money without taking on traditional debt in exchange for Lehman receiving VeriFone shares at a later date. The expectation is that by the time the shares are issued their value would have increased. Companies typically raise money by taking out a loan, which increases debt levels, or by issuing more stock, which lowers the average share value, says Robert Dodd, an analyst at Memphis, Tenn.-based Morgan Keegan & Co. Inc. VeriFone also says it is uncertain about the status of $15 million of a $40 million revolving credit line that was to come from another Lehman Brothers subsidiary, Lehman Commercial Paper Inc. VeriFone says it has not used any of the $40 million.
