Lehman Brothers' bankruptcy petition has left over 40 former Brics Securities employees in a quandary.

Last September, these employees had moved to Lehman as part of the nearly Rs 290 crore (Rs 2.9 billion) deal, under which the Wall Street investment bank had acquired Brics' institutional equity business.

Fifteen employees each were from the research and sales teams and 10 or 12 were from Brics' back-office division.

Following Lehman's Chapter XI filing in the US last week, the future of the Indian institutional equity business is not clear.

The uncertainty, however, has prompted its employees to look for jobs. Several wanted to return to Brics, but a no-poaching agreement restricts the Indian securities firm from taking back these employees. The agreement is for two years and kicks in from the date the agreement was signed in August 2007, sources close to the development said.

In addition, the deal was structured in a way that Lehman was to pay the Rs 290-odd crore (Rs 2.9 billion) in three tranches, with the last one due December 2009. While two tranches have been paid to Brics, Lehman still owes around Rs 120 crore (Rs 1.2 crores). Given the developments last week, it is unclear if the deal will go through.

When contacted, Brics Securities CEO V R Srinivasan declined to comment.

At least two sources said that Brics stands to lose the last installment if it hires any of the over 40 employees who once worked in its institutional equity team. A source said nearly Rs 190 crore (Rs 1.9 billion) was to be paid by Lehman just for taking over the team.

"Hiring employees from Lehman would mean violating the no-poaching agreement and Brics will have to refund a part of the money, which may not be possible. Brics would rather hire fresh employees in this case," said an executive close to the development.

Amid the gloom, there is, however, some good news since some of the former Brics employees are in talks to move to MAPE Advisory Group, an investment banking firm that had advised Mahindra & Mahindra on the deal with Kinetic [Get Quote] Motors.