Lehman Brothers collapse subject of giant lawsuit

The first part of this extremely long  securities fraud complaint filed in U.S. Southern District Court of Texas, reads like a economics history lesson of the recent past.  While the plaintiffs put Lehman Brothers at the center of  fraudulent activity, they also identify plenty of other culprits including accountants Ernst & Young, Merrill Lynch, principals involved at those companies and more.   The main point of the complaint is that all these players had plenty of information back in 2004 that their recklessly, loose lending practices were about to cause the coming collapse and that sunk them under the weight of debt in 2008.  I’m not sure of the legal grounds but it makes compelling reading.

Complaint courtesy Courthousenews

Cost more than a billion to go broke?

Some observers think that the Lehman Brothers bankruptcy may cost more than $1.4 billion in fees.  Others say it will cost only $800 million.  If the later, the estimates for the law firms involved are as follows: 

Weil, Gotshal & Manges, Lehman’s firm: $200 million

Milbank, Tweed, Hadley & McCloy, Firm for unsecured creditors: $200 million

Alvarez & Marsal, Firm winding down assets: $400 million

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Lehman bankruptcy: still creating shockwaves

Tax officials in Austin Texas are concerned that the nearly $18 million that Lehman Brothers and others owe on their ownership stake in ten Austin buildings.  Its seems that the other owners are embroiled in lawsuits with the bankrupt investment bank to get them to pay their fair share but that the money is due now and the lawsuit, not surprisingly, hasn’t resolved the issue.  $9.5 million of this money owed to the Austin school district.

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Lehman Bankruptcy: Austin Property Company Wants $

Here is the language from the Thomas Properties CEO:

“”Through this motion, we are seeking to compel Lehman Brothers to accept and honor its obligation to fund the $100 million revolving credit facility.”

So what’s really going on?  Its not like they will get their $100 million from the very bankruptcy investment bank.  Looks like Thomas Properties wants out of the deal to make other arrangements but they can’t until the court says, forgetaboutit.  Just my guess.

Lehman Bros. Bad for Municipalites

Lehman Bros. bust hit San Mateo County hard

Used funds for paying salaries and making payment on facilities.  Like California municipalities don’t have it bad enough!