When Lehman Brothers filed for its historic bankruptcy last September, it left behind an overlooked asset: the New York financial giant’s extensive art collection.

Sorting out that artwork is proving to be an unexpected challenge for the bankrupt holding company. The Lehman collection encompasses hundreds of largely modern and contemporary paintings that once hung in Lehman’s offices around the world.

Now, Lehman is trying to divvy up the art among two companies that appear to hold claims—Barclays Capital, which bought a portion of the bank’s assets, including its headquarters building in New York, and Neuberger Berman, a company that recently spun off from the bankrupt company. More than 650 pieces worth about $1 million are scheduled to go to auction on the East Coast starting in the fall.

“It’s really complicated—no one ever thought we’d be filing for bankruptcy, and certainly they didn’t put their artwork in mind for that,” said Kimberly Macleod, a spokeswoman for Lehman Brothers Holdings Inc. (LBHI). She said the bankrupt holding company has spent 10 months trying to find the best auction house to sell the pieces in an attempt to get the best value for the estate.

Lehman’s is just one example of a problem facing modern banks. What do they do with their art collections?

From coast to coast, millions of dollars of corporate art that once hung in the offices of well-known banks has itself become entangled in the fallout from the financial crisis. The fate of that artwork is still being sorted out, along with the assets involved in many of the unprecedented bank failures and resulting mergers that took place last year. Some of the surviving financial institutions appear to be holding onto the valuable artwork for their own collections, despite the chance to cushion their coffers with its sale. Others are selling the art or donating it to local museums and nonprofits.

Washington Mutual Bank in Seattle used to house one of the most expansive collections of Northwest art, more than 500 pieces from the likes of Mark Tobey and Morris Graves scattered throughout its thousands of square feet of office space across the city.

New York-based JPMorgan Chase & Co., which bought the bank out of government receivership last September, is still working to sort through the collection. Its plans are only beginning to be revealed.

More than half of the pieces already have been donated to local nonprofits and museums, according to a bank spokeswoman. Still others—such as a well-known Norman Rockwell sketch of Abraham Lincoln—have been shipped back to JPMorgan’s museum in New York. Unknown is whether JPMorgan plans to sell any of the pieces, which are individually valued at anywhere from $250 to $40,000 and above.

JP Morgan also acquired art through its acquisition of troubled investment bank Bear Stearns last spring, but it’s unclear how many pieces it obtained. Its entire collection, including the art from its purchases of WaMu and Bear Stearns, spans 30,000 pieces in 450 locations, according to JPMorgan spokeswoman Darcy Donahoe-Wilmot.

WaMu’s art collection was an accumulation of pieces it had purchased and acquired through bank acquisitions over the last two decades, said Yvonne Banks, the owner of Seattle-based Art Consulting Services, which played a lead role in acquiring WaMu’s art. Art hung on all 42 floors of WaMu Center, the company’s former headquarters building in downtown Seattle.

“Almost every Northwest artist was represented there,” said Banks. “The old masters were all represented, as well as emerging artists.”