Financial News has this week been asking high-profile names from the world of finance – including Larry Fink, Michael Tory and Ed Bonham Carter – about their memories of the US bank's collapse in September 2008.
It also sparked a labrynthine
bankruptcy process that is still going on today. Tony Lomas, the PwC
partner who has been working as joint administrator of Lehman's UK and
European business told Financial News: "For the past five years, the
administrators and a large team of specialists from PwC have worked with
500 continuing Lehman staff and dozens of lawyers from City law firms,
recovering assets, resolving claims and settling disputes with other
group companies, in a quest to maximise recoveries for the company's
creditors.
"In extremely unusual circumstances,
a very successful working relationship has developed between all of
these professionals in efforts to wind down the most complex company in
the Lehman group. It is the most complex insolvency I have ever worked
on."
A venerable Wall Street firm, whose
origins could be traced back to the mid-19th century, Lehman began 2008
by reporting record net profits of $4.2 billion for the previous year.
But it was not to see out the year. Instead, it succumbed to months of
fierce speculation about its financial health and reliance on short-term
funding from counterparties. Its share price dropped from $65.73 in
January 2008 to below $4 on the last trading day before its collapse,
according to a bankruptcy examiner’s report.
In June 2008, Lehman posted its
first loss since going public in 1994. By September, market concerns
over the firm’s health intensified to the point at which it was unable
to access the funding markets.
A weekend of intensive meetings
resulted in hopes that Barclays might save the bank from collapse but
the deal fell apart and the firm filed for Chapter 11 bankruptcy
protection on Monday September 15.
Financial News asked leading
industry figures about their recollections of that fateful weekend and
the lessons they learnt from it.
The answers to our five questions, which have been rolled out throughout the week, can be found at the following links:
1) What is your enduring memory of the day Lehman collapsed? [ http://bit.ly/1awc9EM ]
2) Should Lehman Brothers have been saved? [ http://bit.ly/15J3BTA ]
3) What is the biggest lesson from Lehman's collapse and how has it helped you in your career since? [ http://bit.ly/1evprRb ]
4) Could you spot the next Lehman Brothers? [ http://bit.ly/15WGiLY ]
5) What would you say to Dick Fuld if you met him in the street? [ http://bit.ly/1e8vkFm ]
