When Lehman Bros. filed for bankruptcy in September 2008, among the many claimants was office supply retailer OfficeMax Inc. (NYSE: OMX). The retailer had acquired a Lehman-backed note for $817.5 million in connection with the sale in 2004 of some timberland. The note was nonrecourse to OfficeMax and guaranteed by Lehman. That did not work out so well.
Under the final agreement announced today, the company said:
OfficeMax will recognize a non-cash, pre-tax gain of $671.1 million in the third quarter this year. In the fourth quarter, OfficeMax anticipates that it will make a cash payment in the amount of approximately $15 million, representing the accelerated tax liability on approximately one half of the gain on the 2004 timberlands sale transaction, mostly offset by alternative minimum tax credits. OfficeMax anticipates using available cash to fund the tax payment.
OfficeMax had said in August that the deal was complete except for the final approval from the bankruptcy judge.
OfficeMax shares rose to a new 52-week high yesterday of $7.38. The 52-week low is $3.90.
Paul Ausick
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