8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

March 18, 2011

LEHMAN BROTHERS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	1-9466	13-3216325
(State or other jurisdiction Of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1271 Avenue of the Americas

New York, New York

10020

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code:

(646) 285-9000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01 Regulation FD Disclosure.

As previously disclosed, on September 15, 2008, Lehman Brothers Holdings Inc. (the “Registrant”) filed a voluntary petition for relief under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Court”). Together with the Chapter 11 cases thereafter filed by certain subsidiaries (collectively with the Registrant, the “Debtors”), the cases are being jointly administered under the case caption In re Lehman Brothers Holdings Inc., et. al., Case Number 08-13555 (the “Chapter 11 Proceeding”) pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). The Debtors continue to operate as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

On March 18, 2011, the Debtors filed with the Court a monthly operating report (the “Monthly Operating Report”). A copy of the Monthly Operating Report for the Debtors is attached hereto as Exhibit 99.1. This Current Report (including the Exhibits hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

Limitation on Incorporation by Reference

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Cautionary Statements Regarding Financial and Operating Data

The Registrant cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Report, as it was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of any of the Debtors, or any other affiliate of the Registrant. The Monthly Operating Report was not prepared in accordance with U.S. generally accepted accounting principles, was not audited or reviewed by independent accountants, will not be subject to audit or review by the Registrant’s external auditors at any time in the future, is in a format consistent with applicable bankruptcy laws, and is subject to future adjustment and reconciliation. There can be no assurances that, from the perspective of an investor or potential investor in the Registrant’s securities, the Monthly Operating Report is accurate or complete. The Monthly Operating Report contains a further description of limitations on the information contained therein. The Monthly Operating Report also contains information for periods which are shorter or otherwise different from those required in the Registrant’s reports pursuant to the Exchange Act, and such information might not be indicative of the Registrant’s financial condition or operating results for the period that would be reflected in the Registrant’s financial statements or in its reports pursuant to the Exchange Act. Results set forth in the Monthly Operating Report should not be viewed as indicative of future results.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K and Exhibit 99.1 hereto may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Registrant’s financial condition, results of operations, and business that is not historical information. As a general matter, forward-looking statements are those focused upon future or anticipated events or trends and expectations and beliefs relating to matters that are not historical in nature. The words “believe,” “expect,” “plan,” “intend,” “estimate,” or “anticipate” and similar expressions, as well as future or conditional verbs such as “will,” “should,” “would,” and “could,” often identify forward-looking statements. The Registrant believes there is a reasonable basis for its expectations and beliefs, but they are inherently uncertain, and the Registrant may not realize its expectations and its beliefs may not prove correct. The Registrant undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. The Registrant’s actual results and future financial condition may differ materially from those described or implied by any such forward-looking statements as a result of many factors that may be outside the Registrant’s control. Such factors include, without limitation: (i) the ability of the Registrant to develop, prosecute, confirm, and consummate any plan of reorganization or liquidation with respect to the Chapter 11 Proceeding; (ii) the Registrant’s ability to obtain Court approval with respect to motions in the Chapter 11 Proceeding; (iii) risks associated with third parties seeking and obtaining court approval for the appointment of a Chapter 11 trustee; and (iv) the potential adverse impact of the Chapter 11 Proceeding on the Registrant’s liquidity or results of operations. This list is not intended to be exhaustive.

The Registrant’s informational filings with the Court, including the Monthly Operating Report, are available to the public at the office of the Clerk of the Bankruptcy Court, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004-1408. Such informational filings may be available electronically, for a fee, through the Court’s Internet world wide web site (www.nysb.uscourts.gov), and/or free of cost, at a world wide web site maintained by the Registrant’s Court-approved noticing agent (www.lehman-docket.com).

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Lehman Brothers Holdings Inc. – Monthly Operating Report filed with the Bankruptcy Court on March 18, 2011

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LEHMAN BROTHERS HOLDINGS INC.
Date: March 18, 2011	By:	/s/ William J. Fox
		Name:	William J. Fox
		Title:	Chief Financial Officer and Executive Vice President

EXHIBIT INDEX

Exhibit No.	Description
99.1	Lehman Brothers Holdings Inc. – Monthly Operating Report filed with the Bankruptcy Court on March 18, 2011

EX-99.1

Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

In re:	Chapter 11 Case No.
Lehman Brothers Holdings Inc., et al.,	08-13555
Debtors.

MONTHLY OPERATING REPORT

FEBRUARY 2011

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

SCHEDULE OF PROFESSIONAL FEE AND EXPENSE DISBURSEMENTS

DEBTORS’ ADDRESS:	LEHMAN BROTHERS HOLDINGS INC.
	c/o WILLIAM J. FOX
	1271 AVENUE OF THE AMERICAS
	35th FLOOR
	NEW YORK, NY 10020
DEBTORS’ ATTORNEYS:	WEIL, GOTSHAL & MANGES LLP
	c/o SHAI WAISMAN
	767 FIFTH AVENUE
	NEW YORK, NY 10153
REPORT PREPARER:	LEHMAN BROTHERS HOLDINGS INC., A DEBTOR IN POSSESSION (IN THE SOUTHERN DISTRICT OF NEW YORK)

THIS OPERATING STATEMENT MUST BE SIGNED BY A REPRESENTATIVE OF THE DEBTOR

The undersigned, having reviewed the attached report and being familiar with the Debtors’ financial affairs, verifies under penalty of perjury, that the information contained therein is complete, accurate and truthful to the best of my knowledge.

		Lehman Brothers Holdings Inc.
Date: March 18, 2011	By:	/s/ William J. Fox
		William J. Fox
		Executive Vice President

Indicate if this is an amended statement by checking here:        AMENDED STATEMENT  ¨

TABLE OF CONTENTS

Schedule of Debtors	3
Lehman Brothers Holdings Inc. (“LBHI”) and Other Debtors and Other Controlled Subsidiaries
Basis of Presentation — Schedule of Cash Receipts and Disbursements	4
Schedule of Cash Receipts and Disbursements	5
LBHI
Basis of Presentation – Schedule of Professional Fee and Expense Disbursements	9
Schedule of Professional Fee and Expense Disbursements	10

2

SCHEDULE OF DEBTORS

The following entities have filed for bankruptcy in the Southern District of New York:

	Case No.		Date Filed
Lead Debtor:
Lehman Brothers Holdings Inc. (“LBHI”)		08-13555		9/15/2008
Related Debtors:
LB 745 LLC		08-13600		9/16/2008
PAMI Statler Arms LLC(1)		08-13664		9/23/2008
Lehman Brothers Commodity Services Inc. (“LBCS”)		08-13885		10/3/2008
Lehman Brothers Special Financing Inc. (“LBSF”)		08-13888		10/3/2008
Lehman Brothers OTC Derivatives Inc. (“LOTC”)		08-13893		10/3/2008
Lehman Brothers Derivative Products Inc. (“LBDP”)		08-13899		10/5/2008
Lehman Commercial Paper Inc. (“LCPI”)		08-13900		10/5/2008
Lehman Brothers Commercial Corporation (“LBCC”)		08-13901		10/5/2008
Lehman Brothers Financial Products Inc. (“LBFP”)		08-13902		10/5/2008
Lehman Scottish Finance L.P.		08-13904		10/5/2008
CES Aviation LLC		08-13905		10/5/2008
CES Aviation V LLC		08-13906		10/5/2008
CES Aviation IX LLC		08-13907		10/5/2008
East Dover Limited		08-13908		10/5/2008
Luxembourg Residential Properties Loan Finance S.a.r.l		09-10108		1/7/2009
BNC Mortgage LLC		09-10137		1/9/2009
LB Rose Ranch LLC		09-10560		2/9/2009
Structured Asset Securities Corporation		09-10558		2/9/2009
LB 2080 Kalakaua Owners LLC		09-12516		4/23/2009
Merit LLC		09-17331		12/14/2009
LB Somerset LLC		09-17503		12/22/2009
LB Preferred Somerset LLC		09-17505		12/22/2009

(1) On May 26, 2009, a motion was filed on behalf of Lehman Brothers Holdings Inc. seeking entry of an order pursuant to Section 1112(b) of the Bankruptcy Code to dismiss the Chapter 11 Case of PAMI Statler Arms LLC, with a hearing to be held on June 24, 2009. On June 19, 2009, the motion was adjourned without a date for a continuation hearing.

The Chapter 11 case of Lehman Brothers Finance SA (Case No: 08-13887) has been dismissed.

3

LEHMAN BROTHERS HOLDINGS INC. (“LBHI”) AND OTHER DEBTORS AND OTHER

CONTROLLED ENTITIES

BASIS OF PRESENTATION

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

FEBRUARY 1, 2011 TO FEBRUARY 28, 2011

The information and data included in this Monthly Operating Report (“MOR”) are derived from sources available to Lehman Brothers Holdings Inc. (“LBHI”) and its Controlled Entities (collectively, the “Company”). The term “Controlled Entities” refers to those entities that are directly or indirectly controlled by LBHI, including LAMCO LLC (“LAMCO”), and excludes, among other things, those entities that are under separate administrations in the United States or abroad, including Lehman Brothers Inc., which is the subject of proceedings under the Securities Investor Protection Act. LBHI and certain of its Controlled Entities have filed for protection under Chapter 11 of the Bankruptcy Code, and those entities are referred to herein as the “Debtors”. The Debtors’ Chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure. The Debtors have prepared this MOR, as required by the Office of the United States Trustee, based on the information available to the Debtors at this time, but note that such information may be incomplete and may be materially deficient in certain respects. This MOR is not meant to be relied upon as a complete description of the Debtors, their business, condition (financial or otherwise), results of operations, prospects, assets or liabilities. The Debtors reserve all rights to revise this report.

1. This MOR is not prepared in accordance with U.S. generally accepted accounting principles (GAAP). This MOR should be read in conjunction with the financial statements and accompanying notes in the Company’s reports that were filed with the United States Securities and Exchange Commission.

2. This MOR is not audited and will not be subject to audit or review by the Company’s external auditors at any time in the future.

3. The beginning and ending balances include cash in demand-deposit accounts (DDA), money-market funds (MMF), treasury bills and other investments.

4. Beginning and ending cash balances are based on preliminary closing numbers and are subject to adjustment.

5. Beginning and ending cash and investment balances exclude the following:

• Cash posted as collateral for hedging activity;

• Cash related to LBHI’s wholly-owned indirect subsidiaries Aurora Bank FSB, Woodlands Commercial Bank, Lehman Brothers Bancorp Inc., LBTC Transfer Inc. (formerly known as Lehman Brothers Trust Company N.A.) and Lehman Brothers Trust Company of Delaware;

• Cash pledged on or prior to September 15, 2008 by the Company in connection with certain documents executed by the Company and Citigroup Inc. and HSBC Bank PLC, currently recorded at $2 billion and $224 million; and

• $500 million which was seized by Bank of America (“BOA”) to offset derivatives claims against the Debtors. On November 16, 2010, the Bankruptcy Court ruled that BOA had no right to set-off these funds and must return the $500 million plus an estimated $95 million in interest to the Company.

6. Intercompany transfers between Lehman entities are listed as disbursements for the paying entity and receipts for the receiving entity.

4

LEHMAN BROTHERS HOLDINGS INC. and Other Debtors and Other Controlled Entities

Summary Schedule of Cash Receipts and Disbursements (a)

February 1, 2011 - February 28, 2011

Unaudited ($ in millions, foreign currencies reflected in USD equivalents)

			Debtor Entities															Other Controlled Entities (b)															Total Debtors and Other Controlled
			LBHI			LBSF			LCPI			Other			Total			LAMCO			LB1 Grp			PAMI			Other			Total			Entities
Beginning Total Cash and Investments (2/1/11)	(c	)	$	2,353		$	8,790		$	4,466		$	3,298		$	18,907		$	27		$	1,084		$	1		$	2,499		$	3,610		$	22,517
Restricted Cash	(d	)		(1,350	)		(662	)		(1,784	)		(51	)		(3,846	)		—			—			—			(85	)		(85	)		(3,931	)
Beginning Free Cash and Investments				1,004			8,128			2,682			3,247			15,061			27			1,084			1			2,414			3,525			18,586
Sources of Cash
Derivatives				—			90			—			13			103			—			—			—			—			—			103
Loans				10			1			112			—			123			—			1			—			—			1			124
Private Equity / Principal Investing				10			—			—			—			10			—			32			1			6			38			48
Real Estate				14			—			31			—			45			—			—			15			5			20			65
Other				2			62			13			6			83			—			1			—			—			1			84
Asia				—			—			—			—			—			—			—			—			22			22			22
South America				—			—			—			—			—			—			—			—			—			—			—
Inter-Company Transfers				22			—			29			—			50			—			1			—			—			1			51
Total Sources of Cash				58			152			185			19			414			—			34			15			33			82			496
Uses of Cash
Non-Operating (Principally Preservation of Assets)
Derivatives				—			(10	)		—			—			(10	)		—			—			—			—			—			(10	)
Loans				—			—			(75	)		—			(75	)		—			—			—			—			—			(75	)
Private Equity / Principal Investing				—			—			—			—			—			—			(6	)		—			—			(6	)		(6	)
Real Estate				(24	)		—			(64	)		—			(88	)		—			—			(2	)		(2	)		(4	)		(92	)
Other				(1	)		(40	)		(25	)		(2	)		(68	)		—			—			—			(1	)		(1	)		(69	)
Operating				(40	)		(2	)		—			—			(42	)		(9	)		—			(1	)		(11	)		(21	)		(63	)
Asia				—			—			—			—			—			—			—			—			(19	)		(19	)		(19	)
South America				—			—			—			—			—			—			—			—			(2	)		(2	)		(2	)
Inter-Company Transfers				(29	)		—			—			—			(29	)		—			—			(12	)		(10	)		(22	)		(51	)
Total Uses of Cash				(94	)		(52	)		(164	)		(2	)		(312	)		(9	)		(6	)		(15	)		(44	)		(74	)		(387	)
Net Cash Flow				(36	)		100			21			17			101			(9	)		28			0			(12	)		8			109
FX Fluctuation	(r	)		(1	)		—			—			—			(1	)		—			—			—			(6	)		(6	)		(7	)
Ending Total Cash and Investments				2,316			8,890			4,486			3,314			19,007			18			1,112			1			2,481			3,612			22,619
Restricted Cash				(1,373	)		(662	)		(1,761	)		(51	)		(3,846	)		—			—			—			(83	)		(83	)		(3,929	)
Ending Free Cash and Investments (2/28/11)	(c	)	$	943		$	8,229		$	2,726		$	3,264		$	15,161		$	18		$	1,112		$	1		$	2,398		$	3,529		$	18,690

Totals may not foot due to rounding

5

LEHMAN BROTHERS HOLDINGS INC. and Other Debtors and Other Controlled Entities

Schedule of Cash Receipts and Disbursements (a)

February 1, 2011 - February 28, 2011

Unaudited ($ in millions, foreign currencies reflected in USD equivalents)

			Debtor Entities															Other Controlled Entities (b)												Total Debtors and Other Controlled
			LBHI			LBSF			LCPI			Other			Total			LAMCO		LB1 Grp		PAMI		Other			Total			Entities
Beginning Total Cash and Investments (2/1/11)	(c	)	$	2,353		$	8,790		$	4,466		$	3,298		$	18,907		$	27	$	1,084	$	1	$	2,499		$	3,610		$	22,517
Restricted Cash	(d	)		(1,350	)		(662	)		(1,784	)		(51	)		(3,846	)		—		—		—		(85	)		(85	)		(3,931	)
Beginning Free Cash and Investments				1,004			8,128			2,682			3,247			15,061			27		1,084		1		2,414			3,525			18,586
Sources of Cash
Derivatives
Collections from Live / Terminated Trades	(e	)		—			90			—			13			103			—		—		—		—			—			103
Loans
Agency Receipts	(f	)		—			—			60			—			60			—		—		—		—			—			60
Principal				9			—			41			—			50			—		—		—		—			—			50
Interest				1			1			11			—			13			—		1		—		—			1			14
Private Equity / Principal Investing
Principal				9			—			—			—			9			—		29		1		4			33			42
Interest				1			—			—			—			1			—		3		—		2			5			6
Real Estate
Principal				13			—			26			—			39			—		—		14		5			19			58
Interest				1			—			5			—			6			—		—		1		—			1			7
Other
Interest	(g	)		1			1			—			1			3			—		1		—		—			1			4
Return of Hedging Collateral	(h	)		—			61			8			5			74			—		—		—		—			—			74
Other				1			—			5			—			6			—		—		—		—			—			6
Asia				—			—			—			—			—			—		—		—		22			22			22
South America				—			—			—			—			—			—		—		—		—			—			—
Inter-Company Transfers				22			—			29			—			50			—		1		—		—			1			51
Total Sources of Cash			$	58		$	152		$	185		$	19		$	414		$	—	$	34	$	15	$	33		$	82		$	496

6

LEHMAN BROTHERS HOLDINGS INC. and Other Debtors and Other Controlled Entities

Schedule of Cash Receipts and Disbursements (a)

February 1, 2011 - February 28, 2011

Unaudited ($ in millions, foreign currencies reflected in USD equivalents)

			Debtor Entities															Other Controlled Entities (b)															Total Debtors and Other Controlled
			LBHI			LBSF			LCPI			Other			Total			LAMCO			LB1 Grp			PAMI			Other			Total			Entities
Uses of Cash
Non-Operating (Principally Preservation of Assets)
Derivatives
Payments on Live Trades			$	—		$	(10	)	$	—		$	—		$	(10	)	$	—		$	—		$	—		$	—		$	—		$	(10	)
Loans
Agency Disbursements	(f	)		—			—			(60	)		—			(60	)		—			—			—			—			—			(60	)
Preservation of Assets	(i	)		—			—			(5	)		—			(5	)		—			—			—			—			—			(5	)
Other	(j	)		—			—			(10	)		—			(10	)		—			—			—			—			—			(10	)
Private Equity / Principal Investing
Capital Calls	(k	)		—			—			—			—			—			—			(6	)		—			—			(6	)		(6	)
Real Estate
Preservation of Assets	(l	)		(24	)		—			(64	)		—			(88	)		—			—			(2	)		(2	)		(4	)		(92	)
Other
Aurora Bank / Woodlands Settlement	(m	)		5			—			—			—			5			—			—			—			—			—			5
Hedging Collateral	(n	)		(3	)		(39	)		(25	)		(2	)		(69	)		—			—			—			—			—			(69	)
Other				(3	)		(1	)		—			—			(4	)		—			—			—			(1	)		(1	)		(5	)
Operating
Compensation and Benefits	(o	)		(12	)		—			—			—			(12	)		(5	)		—			—			(10	)		(15	)		(27	)
Professional Fees	(p	)		(24	)		(2	)		—			—			(26	)		—			—			—			—			—			(26	)
Other	(q	)		(4	)		(1	)		—			—			(5	)		(4	)		—			(1	)		(1	)		(6	)		(11	)
Asia				—			—			—			—			—			—			—			—			(19	)		(19	)		(19	)
South America				—			—			—			—			—			—			—			—			(2	)		(2	)		(2	)
Inter-Company Transfers				(29	)		—			—			—			(29	)		—			—			(12	)		(10	)		(22	)		(51	)
Total Uses of Cash				(94	)		(52	)		(164	)		(2	)		(312	)		(9	)		(6	)		(15	)		(44	)		(74	)		(387	)
Net Cash Flow				(36	)		100			21			17			101			(9	)		28			0			(12	)		8			109
FX Fluctuation	(r	)		(1	)		—			—			—			(1	)		—			—			—			(6	)		(6	)		(7	)
Ending Total Cash and Investments				2,316			8,890			4,486			3,314			19,007			18			1,112			1			2,481			3,612			22,619
Restricted Cash				(1,373	)		(662	)		(1,761	)		(51	)		(3,846	)		—			—			—			(83	)		(83	)		(3,929	)
Ending Free Cash and Investments (2/28/11)	(c	)	$	943		$	8,229		$	2,726		$	3,264		$	15,161		$	18		$	1,112		$	1		$	2,398		$	3,529		$	18,690

Totals may not foot due to rounding

7

LEHMAN BROTHERS HOLDINGS INC. and Other Debtors and Other Controlled Entities

Schedule of Cash Receipts and Disbursements (a)

February 1, 2011 - February 28, 2011

Unaudited ($ in millions, foreign currencies reflected in USD equivalents)

Notes:

(a) Includes cash receipts and disbursements for all Debtor Entities and Other Controlled Entities, globally. Activity in Derivatives, Loans, Private Equity / Principal Investing, Real Estate and Other reflects bank accounts that are managed and reconciled by Lehman's U.S. and European operations. Activity in Asia and South America reflects bank accounts that are managed and reconciled by Lehman's Asia and South American operations.

(b) Other Controlled Entities include Non-Debtor entities which are under the control of LBHI, except for Aurora Bank, Woodlands Commercial Bank, Lehman Brothers Bancorp Inc., LBTC Transfer Inc. (f/k/a Lehman Brothers Trust Company N.A.) and Lehman Brothers Trust Company of Delaware, which are not reflected in this schedule.

(c) Beginning and Ending Cash and Investment balances exclude cash posted for hedging activity.

(d) Restricted balances are preliminary estimates of cash in co-mingled or segregated accounts associated with pledged assets, court ordered segregated accounts, funds administratively held by banks and other identified funds which may not belong to the Debtors or Other Controlled Entities.

(e) Collections from Live / Terminated Trades for Other Debtors reflects the following: LBCS $10 million, LOTC $2 million and LBFP $1 million.

(f) Reflects the collection of principal and interest for syndicated loan participants and subsequent distribution to syndicated loan participants.

(g) Reflects interest earned on Court-approved investments portfolio.

(h) Reflects the return of cash posted to hedge foreign currency and interest rate risk for Derivatives, Loans and Real Estate.

(i) Reflects advances on revolving lines of credit.

(j) Reflects disbursements to reduce the outstanding principal balance of the Sumitomo note and principal and interest forwarded to syndicated loan participants.

(k) Primarily reflects capital calls for Direct Investments.

(l) Primarily reflects the Court-approved restructuring of the Archstone Credit Facilities.

(m) Reflects a post-settlement true-up for the Aurora Bank / Woodlands Settlement that was made in November 2010.

(n) Reflects cash posted to hedge foreign currency and interest rate risk for Derivatives, Loans and Real Estate.

(o) Compensation and Benefits includes fees paid to Alvarez & Marsal as interim management. A portion of the $12 million related to LBHI will be subject to future cost allocation to various Lehman legal entities.

(p) A portion of the $24 million related to LBHI will be subject to future cost allocation to various Lehman legal entities.

(q) Primarily reflects expenses related to occupancy, the Transition Services Agreement, taxes, insurance and infrastructure costs. A portion of the $4 million related to LBHI will be subject to future cost allocation to various Lehman legal entities.

(r) Reflects fluctuation in value of foreign currency bank accounts.

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LEHMAN BROTHERS HOLDINGS INC. (“LBHI”) AND OTHER DEBTORS AND OTHER

CONTROLLED ENTITIES

BASIS OF PRESENTATION

SCHEDULE OF PROFESSIONAL FEE AND EXPENSE DISBURSEMENTS

DATED FROM FILING DATE TO FEBRUARY 28, 2011

The information and data included in this Monthly Operating Report (“MOR”) are derived from sources available to Lehman Brothers Holdings Inc. (“LBHI”) and its Controlled Entities (collectively, the “Company”). The term “Controlled Entities” refers to those entities that are directly or indirectly controlled by LBHI, including LAMCO LLC (“LAMCO”), and excludes, among other things, those entities that are under separate administrations in the United States or abroad, including Lehman Brothers Inc., which is the subject of proceedings under the Securities Investor Protection Act. LBHI and certain of its Controlled Entities have filed for protection under Chapter 11 of the Bankruptcy Code, and those entities are referred to herein as the “Debtors”. The Debtors’ Chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure. The Debtors have prepared this MOR, as required by the Office of the United States Trustee, based on the information available to the Debtors at this time, but note that such information may be incomplete and may be materially deficient in certain respects. This MOR is not meant to be relied upon as a complete description of the Debtors, their business, condition (financial or otherwise), results of operations, prospects, assets or liabilities. The Debtors reserve all rights to revise this report.

1. This MOR is not prepared in accordance with U.S. generally accepted accounting principles (GAAP). This MOR should be read in conjunction with the financial statements and accompanying notes in the Company’s reports that were filed with the United States Securities and Exchange Commission.

2. This MOR is not audited and will not be subject to audit or review by the Company’s external auditors at any time in the future.

3. The professional fee disbursements presented in this report reflect the date of actual cash payments to professional service providers. The Debtors have incurred additional professional fee expenses during the reporting period that will be reflected in future MORs as cash payments are made to providers.

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LEHMAN BROTHERS HOLDINGS INC. and Other Debtors and Other Controlled Entities

Schedule of Professional Fee and Expense Disbursements (a)

February 2011

Unaudited ($ in thousands)

		February-2011		Filing Date Through February-2011 (b)
Debtors - Claims and Noticing Agent
Epiq Bankruptcy Solutions LLC	Claims Management and Noticing Agent	$	1,389	$	12,307
Debtors - Section 363 Professionals
Alvarez & Marsal LLC	Interim Management		9,207		412,695
Kelly Matthew Wright	Art Consultant and Auctioneer		—		91
Natixis Capital Markets Inc.	Derivatives Consultant		—		14,297
Debtors - Section 327 Professionals
Bingham McCutchen LLP	Special Counsel - Tax		538		16,787
Bortstein Legal LLC	Special Counsel - IT and Other Vendor Contracts		30		3,716
Clyde Click, P.C.	Special Counsel - Real Estate		8		51
Curtis, Mallet-Prevost, Colt & Mosle LLP	Special Counsel - Conflicts		1,135		25,193
Dechert LLP	Special Counsel - Real Estate		161		1,533
Deloitte LLP	Tax Services		111		190
Discover Ready LLC	eDiscovery Services		410		11,945
Ernst & Young LLP	Audit and Tax Services		—		1,553
Gibson Dunn & Crutcher LLP	Special Counsel - Real Estate		119		1,805
Hudson Global Resources	Contract Attorneys		349		9,059
Huron Consulting	Tax Services		—		2,145
Jones Day	Special Counsel - Asia and Domestic Litigation		936		48,002
Kasowitz, Benson, Torres & Friedman	Special Counsel - Litigation		19		589
Kleyr Grasso Associes	Special Counsel - UK		14		454
Latham & Watkins LLP	Special Counsel - Real Estate		28		413
Lazard Freres & Co.	Investment Banking Advisor		—		24,900
McKenna Long & Aldridge LLP	Special Counsel -Commercial Real Estate Lending		—		4,935
MMOR Consulting	Tax Services		44		271
Momo-o, Matsuo & Namba	Special Counsel - Asia		—		137
O'Neil Group	Tax Services		68		1,270
Pachulski Stang Ziehl & Jones	Special Counsel - Real Estate		178		1,880
Paul, Hastings, Janofsky & Walker LLP	Special Counsel - Real Estate		158		1,018
Pricewaterhouse Coopers LLP	Tax Services		—		858
Reed Smith LLP	Special Counsel - Insurance		69		409
Reilly Pozner LLP	Special Counsel - Mortgage Litigation and Claims		236		5,463
Simpson Thacher & Bartlett LLP	Special Counsel -SEC Reporting, Asset Sales, and Congressional Testimony		—		2,558	(c)
SNR Denton LLP	Special Counsel - Real Estate		70		722
Sutherland LLP	Special Counsel - Tax		96		286
Weil Gotshal & Manges LLP	Lead Counsel		7,768		279,878
Windels Marx Lane & Mittendorf, LLP	Special Counsel - Real Estate		44		2,213
Wollmuth Maher & Deutsch LLP	Special Counsel - Derivatives		—		582
Creditors - Section 327 Professionals
FTI Consulting Inc.	Financial Advisor		4,987		55,979
Houlihan Lokey Howard & Zukin Capital Inc.	Investment Banking Advisor		333		10,933
Milbank Tweed Hadley & McCloy LLP	Lead Counsel		—		89,886
Quinn Emanuel Urquhart Oliver & Hedges LLP	Special Counsel - Conflicts		—		15,242
Richard Sheldon, Q.C.	Special Counsel - UK		—		130
Examiner - Section 327 Professionals
Duff & Phelps LLC	Financial Advisor		—		42,502
Jenner & Block LLP	Examiner		18		57,951
Fee Examiner
Feinberg Rozen LLP	Fee Examiner		252		3,158
Brown Greer Plc	Fee and Expense Analyst		23		539
Total Non-Ordinary Course Professionals			28,799		1,166,526
Debtors - Ordinary Course Professionals			1,313		36,132
US Trustee Quarterly Fees			—		1,182
Total Professional Fees and UST Fees (d)		$	30,112	$	1,203,840

(a) All professional fees have been paid by LBHI; however, a portion has been charged back to debtor and non-debtor subsidiaries based on the direct costs associated with each entity and an allocation methodology.

(b) The figures reflected in this table represent cash disbursements from LBHI's filing date through the end of February 2011. The figures do not include accruals.

(c) Filing Date Through February-2011 balance for Simpson Thacher & Bartlett LLP has been decreased by $47 thousand to account for payments that were inadvertently included in previous MORs.

(d) Excludes professional services rendered on behalf of non-debtor entities which are invoiced separately.

10