Lehman Brothers is in talks with prospective buyers to sell about $30 billion in commercial mortgage assets and other hard-to-value securities, the New York Post reported on its website.
The preliminary talks involve Lehman selling some of its risky assets to a domestic or foreign entity and perhaps providing funding for the sale, the paper said.
The paper, which did not say how it obtained the information, also said the investment bank may have hired Lazard for advice.
The exact reason for hiring of the boutique advisory firm could not be learned, NY Post said.
Both Lehman Brothers and Lazard could not be reached immediately for comment.
Wall Street banks have been battered due to exposure to risky mortgage-backed securities on their balance sheets resulting in billions of dollars of write-offs and losses.
Last week, Merrill Lynch agreed to sell $30.6 billion of collateralized debt obligations (CDOs) to an affiliate of Lone Star Funds for just $6.7 billion, or about 22 cents on the dollar.
Investors have been speculating about the fate of Lehman, the smallest of the major Wall Street banks, sharply pushing down its share price, after the collapse of rival Bear Stearns in March.
Lehman shares closed at $17.34 on the New York Stock Exchange on Thursday.