Reports Lehman (LEH) May Spin-Off $32B To 'Bad Bank'

According to reports from Bloomberg, Lehman Brothers (NYSE: LEH) may move forward with a plan to shift $32 billion in commercial mortgages and real estate into a new company, emulating the 1980 good-bank-bad-bank model.

The report said the new company may have $8 billion in equity provided by Lehman. Shares of the new company would be owned by current Lehman shareholders.

This is apparently one of several options Lehman is considering. Korea Development Bank, which recently confirmed talks to invest in Lehman, could provide other alternatives for the embattled bank.

Shares of Lehman are down over 8% to $15.52 in late day trading today.

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