Massive amounts of money were transferred from the coffers of Lehman prior to filing for bankruptcy. Where did the money go? A similar procedure was used in the The Bear Stearns bankruptcy.
Note the date this was published!
Why has the media not picked up on this?
They’re part of the problem.
There are multiple regulations requiring paperwork to be authorized for this transfer to happen. It cannot be done legally!
Lehman Unit Shrank $400 Billion Before Bankruptcy
By Linda Sandler
Sept. 26 (Bloomberg) — Lehman Brothers Holdings Inc.’s brokerage unit lost more than $400 billion in assets in the months before its parent filed for bankruptcy protection, according to the trustee overseeing customer accounts.
Lehman’s holding company filed for bankruptcy Sept. 15 claiming $639 billion in assets, using four-month-old data. The wholly owned brokerage unit shrank to less than $100 billion in assets from $500 billion “a few months ago,” according to a Sept. 19 court statement by James Giddens, the trustee overseeing the settling of Lehman brokerage customer accounts by the Securities Investor Protection Corp.
The loss in value was caused by “changes in the market,” according to Giddens, a partner at law firm Hughes Hubbard & Reed, who spoke at a bankruptcy court hearing in Manhattan. The runoff may indicate Lehman’s customers, including many hedge funds, canceled and closed out trades as they began to doubt the firm’s ability to navigate the credit crunch, bankruptcy analysts and lawyers said.
Most of Lehman’s pre-bankruptcy assets were securities, according to its balance sheets. Lehman said on Sept. 10 that the consolidated gross assets of the firm stood at $600 billion and net assets at $311 billion. The difference between net and gross is the so-called matched book, which is overnight lending or securities pledged for overnight borrowing.
Bear Stearns, once the fifth-biggest U.S.
Giddens didn’t return calls requesting comment on his statement. SIPC President Stephen Harbeck said he’d seen the brokerage’s latest asset totals and couldn’t remember the numbers, which “we don’t need to know to do our job” of settling the 630,000 customer accounts.
Customer accounts at the Lehman Brothers Inc. brokerage that aren’t on the balance sheet total about $138 billion, Lehman’s bankruptcy lawyer Harvey Miller said in court on Sept 19. The trustee’s figure of about $500 billion for brokerage assets before the runoff corresponds to a balance sheet published in 2007, which calculated assets at $478 billion.
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan