Lehman Brothers approved $100 million executive payout days before declaring bankruptcy

[marmar]

from ThinkProgress:


Lehman Brothers approved $100 million executive payout days before declaring bankruptcy.»

The Times of London reports that just three days before going bankrupt, the board of Wall Street financial giant Lehman Brothers “signed off on more than $100m (£59m) in payouts to five top executives.” In the two years prior to Lehman’s collapse, the same executives “were generously remunerated while overseeing forays into risky commercial real-estate investments that helped to bring the company down.”


http://thinkprogress.org/2008/10/14/lehman-bailout-payout/

[BrklynLiberal]

1. There should be some way to get this money back and give it to the employees who lost

their entire retirement plans that were in Lehman Stock!!!!

[leftofthedial]

2. arrest these thieves and seize their assets.

corporate exectives, especially CEO's, are nothing but parasites anyway. The only substantive decisions they've made for the last 30 years are to steal and to ship jobs offshore.

[Initech]

3. Whoaaaaaaaaa... take the money and run!

Come on - sing it with me!

[Initech]

4. Why is this not on the front page?

[depakid]

5. The bankruptcy court isn't going to let them get away with that

Not going to happen.

[Dr.Phool]

11. Are you kidding? The bankruptcy court will probably double it.

The first thing the attorney's due is file motions with the court for retention bonuses to keep "qualified knowledgeable people" so that they can help steer the company through the proceedings. And there's usually a hefty pay increase to go along with it.

Take it to the bank. It's going to happen.

[depakid]

13. I'm sure they'll try, but they won't be successful in this case

The creditors attorney's not only have the law behind them- but the overwhelming public sentiment as well.

[jazzjunkysue]

20. Anyone know if there are creditor attorneys and if they're on it, and their names?

I'm not trying to make a point here, I'm just curious if anyone knows what or who to look for on this.

[dkofos]

6. And the cocksuckers want more. OFF WITH THEIR HEADS

[Raster]

7. Correct me if I am wrong, but I believe that Jeb Bush* received a Lehman bonus.

Yes, that fucking Jeb Bush*! I do not believe he was one of the top five executives, but I do believe was in the last bonus pool. Does anyone else have any info?

[Hannah Bell]

18. I think Jeb was "consultant", so not sure what he got. but cousin Walker is complicit:

Lehman E-Mail: Execs Mock Idea of Bonus Cut

October 06, 2008 05:32 PM ET

Just before Richard Fuld, the CEO of the now bankrupt Lehman Brothers, testified on Capitol Hill Monday, House Committee on Oversight and Government Reform staffers distributed a handful of E-mails that they had obtained during their investigation of the company.

Perhaps the most damaging one is the following. In it, two executives—Fuld and George H. Walker, who sits on Lehman’s executive committee and is a cousin to President George W. Bush—dismiss a recommendation that top management forgo its bonuses for the year.

http://www.usnews.com/blogs/the-home-front/2008/10/6/lehman-e-mail-execs-mock-idea-of-bonus-cut.html

[Raster]

19. I knew the bush* family was somehow involved. I think if we dig a big deeper we will find that

Jeb Bush* also profited off of the Lehman bankruptcy.

[Hannah Bell]

22. i wouldn't be a bit surprised,

[pitohui]

8. this is clear fraud

all on the board who voted for this and all who took this money need to be in federal prison now

how hard is that?

oh that's right -- it's OK if you're a republican

[TexasObserver]

9. There is a specific provision of the bankruptcy code which allows suing those insiders ...

... and making them give the money back.

It's called a fraudulent conveyance, made in anticipation of the company filing bankruptcy, and it indicates a breach of the fiduciary duty of such officers to serve the interests of the company, not themselves.

The creditors committee should sue them each, and try the case if they won't give the money back.

[bertman]

10. I hope you're right, but I'll believe it when I see it.

[TexasObserver]

14. I would say it's almost a certainty.

A Creditors Committee is formed, and that committee often presses cases for officer or director misconduct, including filing lawsuits inside the bankruptcy court, or adversary proceedings, against former or current officers and directors. Insurance policies defending such officers and directors, commonly called D&O policies, are often in place and responsive. Their limits are targeted by the Creditors Committee.

Lawsuits are also filed to recover the transfer of value that took place in the last few months before the bankruptcy filing, often as a result of insider dealings, or self dealing by top officers and directors.

I can almost guarantee you these cases will be filed and pursued, unless there's some salvation for the firm in the near term. You can bet someone is already working up the facts to support filing a lawsuit against the officers who gave themselves $100 million three days before filing for bankruptcy.

And guess what? You will likely see some justice dealt out with those guys. The bankruptcy court can make them cough up that money, and it will likely do so.

[crickets]

12. Dear god, I hope so.

And after they have to give back all of that money, they should all go to prison for a very, very long time. Slim hope, but oh...

[TexasObserver]

15. The civil case for fraudulent conveyance in anticipation of bankruptcy is easy.

Making a criminal case will be much harder, however, assuming there have been criminal statutes broken.

[lpbk2713]

16. Never fails. The fat cats at the top get their golden parachutes.

While the grunts at the bottom end of the scale are lucky if they get to clean out their desks.

[prayin4rain]

17. Noway!!! They HAVE to go down for this!! AARRGGHHH this mess makes me so mad!! n/t

[Blue_Tires]

21. it's shit like this that should have been negotiated during the "bailout"

especially since congress was in the rare position of advantage...

[Hidden Stillness]

23. Corporate Bailouts with no Regulations Attached are ALWAYS Criminal Scams

This is just like Enron, when they were telling employees not to sell thier shares of stock (invested for their retirement), that everything was "just fine," while top executives sold theirs, etc.; employees never got their lost money back even though it was fraud. Also, just heard a great guest on "Washington Journal," economist Joseph Stiglitz--fabulous--on this bailout, etc., and one point made, was the shocking and strange deal Paulson made for the Government to bail out Lehman, Paulson's corporation. The terms were terrible, very favorable to the corporation and horrible for taxpayers (unnecessarily so), we will probably never get any profit return, the terms were so bad, and it was suspicious. Remember, Paulson is there for the corporate world, not the Government, just like oil executives Bush and Cheney.

This also reminds me of the disastrous idea by Hoover--also bailing out banks and stockbrokers rather than helping the unemployed, etc., and it also failed completely. It turns out, after Hoover established the Reconstruction Finance Corporation, 1931, to funnel money to unregulated banks and other industries, that one of the highest beneficiaries of the money was Charles Dawes, Hoover connection and Vice-President under the Republican Coolidge. Dawes then resigned, and shortly AFTER that, Dawes's Chicage bank received a "loan" (never repaid) of some $90 million. Isn't that odd? Why, you would almost think the whole thing was just another corporate scam, especially after it was revealed, (by, I think, David Cay Johnston, who wrote the book "Free Lunch"), that Paulson stuck a huge tax cut for the corporation that would take over one of the recent bankrupt financial corporations--can't remember which, maybe AIG--stuck in the bailout bill itself.

This is just another "great killing on the market" to them; all they are doing is positioning their corporations for advantage in relation to each other, which was why Paulson did not bail out competitors. Meanwhile, the economy dies because of less and less money for the population. When will they learn?

[Vinnie From Indy]

24. The system is rigged!

The motherfuckers at Lehman deserve prison time not $20,000,000. each.

Lehman's demise wiped out a good chunk of my father's retirement even though he was in a so-called "very safe" fund. He worked his whole life to have these fucking bastards steal his retirement! BASTARDS!

[newtothegame]

25. Sickening

[Disturbed]

26. McLame was actually correct when he said that Paulson should

be fired. Yeah, he was incorrect at first saying that if he were the Pres. would fire Paulson but his intent was correct. The crap that Paulson first came out with was pure BS intended to give his rich friends $Millions while screwing over Americans that actually pay taxes.

[spanone]

27. robber barons