According to the New York Times (Lehman Managers Portrayed as Irresponsible) Lehman executives were looting the company just days before it went belly up:
One Lehman document among thousands reviewed by the House committee showed that four days before the bank filed for bankruptcy protection, Lehman’s compensation committee was asked to grant $20 million in “special payments” for three executives who were leaving, Mr. Waxman said. An e-mail exchange recommending a delay in bonus payments was apparently brushed aside.
Another document showed that executives were warned in a January 2008 meeting that the company was facing liquidity problems. Yet the firm moved forward with capital outlays, including $5 billion in bonuses, $4 billion in shares and $750,000 in dividend payments between 2007 and the firm’s bankruptcy filing on Sept. 15.
I am just a country lawyer, and I stopped doing bankruptcies when the law was “reformed”, but I think I know a preference (and an insider preference at that) when I see one. It is to be hoped that the trustee, whoever he or she may be, will be contacting these folks post-haste to ask for that money back.
2 Comments