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Lehman Employees Brace For Liquidation

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Employees at the Lehman Brothers in midtown Manhattan are described as "crying, angry, distraught" by a witness. They've been filing out of the building this evening.
The bank was said by a person familiar with the matter to be close to confirming that it will file under Chapter 7 of the bankruptcy code, which means the firm will be liquidated.
However Robert Peston at the BBC says it will be Chapter 11 rather than Chapter 7. "Preparations have been made for Lehman Brothers, the substantial US investment bank, to obtain protection from its creditors under US Chapter 11 insolvency procedures," he writes.
Meanwhile, talks continue at the New York Federal Reserve. With the two major buyers for Lehman Brothers, Barclays and Bank of America, having walked away from deals this afternoon, the talks now are focussed on limiting the damage from Lehman's collapse. These talks include consideration of a merger between Merrill Lynch and Bank of America, hoping to stop the "who is next" question from toppling another Wall Street firm.