Drexel Details Post-Bankruptcy Plans

The once-mighty Drexel Burnham Lambert Group plans to emerge from bankruptcy next year as a small company called Newco with about 20 staff, according to papers filed Friday.

Drexel, previously a high-powered Wall Street investment banking firm, had about 5,700 employees when it filed for bankruptcy last year after pleading guilty to securities fraud and paying $650 million in fines.

According to the company’s bankruptcy disclosure statement, Newco is expected to have assets of $450,000 by the end of next year, rising to $732,800 by 1996.

In addition, a trust will be set up to distribute Drexel’s assets.

Separate court papers filed Friday contended that Michael Milken, Drexel’s fallen junk bond king, has told prosecutors that many Wall Street crimes are easily detectable if brokerages set up proper procedures.

The information was contained in an affidavit filed by one of Milken’s lawyers, Richard Sandler.

Milken’s lawyers are trying to persuade U.S. District Judge Kimba Wood to reduce his 10-year sentence because of the help he has given prosecutors.

Milken began serving his sentence on March 3 at the Federal Prison Camp in Pleasanton, Calif., and is eligible for parole in late 1994.