NYT reports that the filing will happen tonight. It'll be the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago. This would be a liquidation since Lehman will not be able to reorganize.

Lehman will seek to place its parent company, Lehman Brothers Holdings, into bankruptcy protection, while its subsidiaries will remain solvent while the firm liquidates its holdings, these people said. A consortium of banks will provide a financial backstop to help provide an orderly winding down of the 158-year-old investment bank. And the Federal Reserve has agreed to accept lower-quality assets in return for loans from the government.