"On January 29, 2008, Lehman Brothers Holdings Inc. (“LBHI”) reported record revenues of nearly $60 billion and record earnings in excess of $4 billion for its fiscal year ending November 30, 2007. During January 2008, Lehman’s stock traded as high as $65.73 per share and averaged in the high to midfifties, implying a market capitalization of over $30 billion. Less than eight months later, on September 12, 2008,
Lehman’s stock closed under $4, a decline of nearly 95% from its January 2008 value.
"On September 15, 2008, LBHI sought Chapter 11 protection, in the largest bankruptcy proceeding ever filed.
"There are many reasons Lehman failed, and the responsibility is shared. Lehman was more the consequence than the cause of a deteriorating economic climate.
"Lehman’s financial plight, and the consequences to Lehman’s creditors and shareholders, was exacerbated by Lehman executives, whose conduct ranged from serious but nonculpable errors of business judgment to actionable balance sheet manipulation; by the investment bank business model, which rewarded excessive risk taking and leverage; and by Government agencies, who by their own admission might better have anticipated or mitigated the outcome."
Full report:
»
lehmanreport.jenner.com/The discussion currently is focusing on the use of Repo 105 and Repo 108 transactions to temporarily remove securities inventory from its balance sheet, usually for a period of seven to ten days, and to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008.
»
lehmanreport.jenner.com/ ··· %203.pdfThis is a very long report with thousands of footnotes...lots of details.
