Harvey Miller, the lawyer guiding Lehman Brothers Holdings through the biggest-ever U.S. bankruptcy, sipped a cappuccino at a tourist-filled cafe near Manhattan’s Central Park and reflected on how his client’s collapse five years ago went from unthinkable to inevitable.
Bloomberg Reports that Lehman’s demise 'ignited a worldwide conflagration that almost brought down the global financial system', said Miller, who filed the Chapter 11 petition at 2 a.m. on Sept. 15, 2008, in New York after the bank failed to win U.S. government aid or attract a buyer. 'The consequences were unknown'.
Five years later, Miller takes credit for helping fend off some creditors’ liquidation demands and instead turning the remains of one of the biggest failures of the financial crisis into a going concern.
In the process, the Lehman estate has paid more than $2 billion in fees and expenses to professionals like him for that work, dwarfing the previous record of $757m in Enron Corp.’s bankruptcy.
Miller, who also worked on the General Motors bankruptcy, said the expense can be blamed in part on the Lehman case’s chaotic start, after Federal Reserve Chairman Ben Bernanke and then-U.S. Treasury Secretary Hank Paulson declined to bail out the 158-year-old firm.
Paulson said at a White House briefing on the day of the bankruptcy that he 'never once considered it appropriate to put taxpayer money on the line in resolving Lehman Brothers'.
That decision contrasted with deals he helped broker to provide Fed financing for JPMorgan Chase’s agreement in March that year to buy Bear Stearns Cos. and his takeover of mortgage-finance companies Freddie Mac and Fannie Mae.
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