Why MUST Lehman Brothers File Bankrupcy TONITE?

This is some weird shit that keeps getting weirder.

Now BAC is buying MER for $30 yet it saw absolutely no value in LEH.

LEH wasn't even trying to sell itself whole until a few days ago. I'm sure it has some assets that are valuable like Neuberger Berman and its office buildings that it could've easily sold.
 
Let say the Korean Development Bank offered LEH $16 a share last week.

Why didn't LEH call them up on Friday after the close and ask for $6/share?

A bankrupcy filing totally fucks over every employee and executive with shares in the company including Fuld - who will now get shit for his shares. Even Jimmy Cayne of BSC walked away will multimillions.
 
Quote from xednise:

All the potential buyers have backed away from any LEH deal without fed backing. The firewall is at MER, that's where the fed attention is focused. LEH is done.
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exactly my feeling. mer was next in line- bac buying mother merrill stops the dominos (or so they hope).

my feeling is that if some good news comes out of aig, mer/aig news will trump leh news and we certainly won't have the es at 1222 at 4est monday...
 
The fix was in when they trashed the preferred shareholders of Fannie and Freddie. Prior to the takeover everyone was figuring they wouldn't beat up on the preferreds, because so many banks held them, first, and second, it would make issuing preferreds to recapitalize more expensive.
Note this story from <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=a8UlgjJf3Pz4&refer=home">Bloomberg from last week</a>:

The market's tumble is making it more expensive for banks and brokers trying to raise fresh capital after taking $506 billion of writedowns and losses on the collapse of the subprime-mortgage market.
Sales of preferred securities in the U.S. have risen 48 percent this year to about $44 billion from more than $30 billion in the same period of 2007, according to data compiled by Bloomberg. The average yield as measured by the Merrill index has risen to 10.4 percent from 8.8 percent on Sept. 5 and 7.9 percent at the end of last year.
The takeover was ``unambiguously bad'' for preferred investors and ``likely set a precedent for any future rescue transactions,'' Kathleen Shanley, an analyst at bond research firm Gimme Credit LLC in Chicago, wrote in a Sept. 7 report.
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Fitch came out and said Lehman's main problem would be raising capital. The stock tanked, and the death watch began in earnest.
Looks to me like Paulson taking advantage of the situation to take out GS's competitors. No way the trashing of the preferreds was done on principal. As for politics, that consideration would have been satisfied by wiping out the common equity holders. Only folks who follow this stuff would have known or cared about the preferred situation.
The MER deal is meant to make sure it goes no farther, since if the panic gets bad enough, even GS wouldn't be safe.
 
Does any one else find it so hard to believe that here the people that do nothing but work with money and making money all day couldn't handle the money they were entrusted with to the point that they have to file for bankruptcy or sell the company. Trust is completely out the window. What happened to the "prudent man " law?
Better yet, where are Randolf and Mortimer Duke when you need them?
 
""If there is no filing, the trades cease to exist." "

When I play golf, I call my mulligan prior to teeing off, unless I really get a hold of it, then it counts.
 
Quote from 1Reason:

LEH is facing a downgrade of their rating which will increase the cost of borrowing to the point of taking away profitability.

Even so, LEH has cash so instead of BK or a buyout that equals little shareholder value why not ride it out and see if the paper that LEH holds that is the question of valuation finds better pricing and perhaps LEH is able to find some shareholder value.

I am not saying its likely much less that I think it will happen but I would not be supprised to see no BK if a deal is not worked out and LEH just opens tomorrow. Traders will most likely be confused as to what value to give LEH then. As long as the FED window is open and others are willing to trade with LEH there may be a light and weak pulse for a while. Perhaps long enough to find the cure.
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it's like a scene from one of those hospital shows...
 
Quote from trefoil:


The MER deal is meant to make sure it goes no farther, since if the panic gets bad enough, even GS wouldn't be safe.
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Or it was done to save his GS buddy, John Thain.
 
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