Tag: Lehman Brothers

Accounting News Roundup: Lehman Failure Was a Team Effort; Boston Provident Ex-CFO Faces Prison After Guilty Plea; Who Wants to Watch a Toxic Asset Die? | 03.12.10

• JPMorgan, Citigroup Helped Cause Lehman Collapse, Report Says [Bloomberg]
There’s so much blame to go around: Dick Fuld! Every Lehman CFO that ever worked there! JP Morgan, Citi, Ernst & Young (who we’ll get to shortly), you’re all at fault too! But mostly Dick Fuld. He was putting lots of pressure on Lehman’s balance sheet magicians to reduce the bank’s debt. The report states that Fuld was “at least grossly negligent” and if it gets worse than that, you’ll certainly hear about it.

According to the Bankruptcy Examiner’s report, there was plenty of parties that didn’t help matters. JP Morgan and Citi were demanding more collateral from Lehman as the firm tried to stave off death while E&Y sat back as LEH got all hocus-pocus with their accounting. So pick a company or person you don’t like and point the finger. It sounds like an argument can be made.

All this amounts to largest bankruptcy in history and boy will it sell a helluva lot of books, movie tickets, and HBO subscriptions. Silver lining!


• Trader faces up to 6 1/2 years in prison [Bloomberg via Boston Globe]
Former Boston Provident CFO Ezra Levy pleaded guilty to securities and wire fraud after being accused of stealing $3 million from New York-based Boston Provident Partners, LP. Levy told the judge that he used the money to pay ‘personal expenses’ although no word on what the loot was. Presumably not a fleet of limos.

• We Bought A Toxic Asset; You Can Watch It Die [NPR]
Ever dreamed of owning just a small piece of a toxic asset just watch the slow, agonizing death? Of course! Some reporters at NPR chipped in to invest $1,000 in a bond with over 2,000 bad, really bad mortgages all for the sake of journalistic interest. If the team somehow manages to make money it’s going to charity.

PwC Basically Says That the Lehman Brothers Bankruptcy is a Trainwreck

trainwreck.jpgIf you find yourself out of work but are willing to endure several sleepless nights across the pond, PwC in the UK may need some help with the administration of Lehman Brothers.
More, after the jump


Reuters, via NYT:

PriceWaterhouseCoopers, which is working with over 100 companies, mostly in the UK but also in continental Europe, said on Sunday: “We’re dealing with a large number of entities and therefore the claims could be as much as $100 billion.
“These claims are exceptionally complex and we anticipate a large amount of further work in dealing with (them).”
A significant amount of the claims arose as a result of guarantees issued by the parent company to its subsidiaries, the administrator said.
PwC said it had worked with administrators in other affiliates to understand Lehman’s accounting system so a standard approach to the reconciliation of inter company balances could be agreed.
“If this can be achieved then it should reduce the likelihood of affiliates suing each other in pursuit of amounts that are owed between the different Lehman estates,” it added.

Not sure what kind of expectations Lehman’s creditors have but we’d encourage a cynical outlook.
Lehman Claims Could Reach $100 Billion: PwC [Reuters via NYT]
Lehman Bankruptcy Won’t Be Pretty [JDA]

eBay Beats the Numbers Thanks to Lehman Schwag

ebay.pngAt least that’s what we’re guessing.
Bloomberg:
“EBay Inc., owner of the most visited U.S. e-commerce Web site, reported second-quarter profit that beat analysts’ estimates, a sign that Chief Executive Officer John Donahoe’s turnaround efforts are working.”
Whatevs. We’d argue beauties like this are the reason for the good Q.
EBay Profit Beats Estimates in Sign That Turnaround Is Working [Bloomberg]

Lehman Working to Pay Off Debt, One Tchotchke at a Time

lehman tote.jpgIn a couple months it will be at the one year anniversary of the collapse Lehman Brothers. In order to catch you up on the firm’s progess in paying off the $250 billion in debt owed to creditors, we proudly present The Lehman Store, courtesy of eBay.
So far the Lehman Store has 100% positive feedback with comments such as: “Great Lehman tie and excellent delivery time.” and “A+ SELLER”.
Lehman couldn’t be more pleased, “‘We are really excited to be able to offer this to the public because there is a demand,’ said Lehman spokeswoman Kimberly Macleod in a telephone interview.”
“There is a demand“, people. And since there are currently 66 items on the auction block, you’d better get on this, PRONTO.
Lehman Holds EBay Garage Sale, Hawking Trinkets to Pay Off Debt [Bloomberg]