Another $25 Million Vanishes

By: DIANA GOLOBAY
October 31, 2008

We’ve been watching huge sums of money either go missing or disappear from balance sheets lately, whether because somebody is missing payments due them or because they held exposure to a failed firm (or one put into conservatorship, which, really, is the same thing). Of particular interest is the effect of Lehman Bros’ failure on the balance sheets of already-suffering firms.

American Banker caught this one, involving some of the corporate credit unions we’ve talked about before:

Southwest Corporate FCU said yesterday it wrote off $24.7 million of unsecured debt it held in Lehman Brothers Holdings, the second corporate in as many weeks to take a charge related to the bankrupt brokerage.

Melissa Wardell, chief financial officer for the $10 billion corporate, said Southwest had $49.5 million in senior Lehman debt and recorded a 50% other-than-temporary impairment charge in September, after the venerable brokerage filed for Chapter 11 bankruptcy. Southwest could take further charges depending on how the bankruptcy plays out.

If you’re interested in how credit unions might factor into this mess, check out our earlier story.