Investment Banking in 2008 (A): Rise and Fall of the Bear Harvard Case Solution & Analysis

Gary Parr, deputy chairman of Lazard Fr resolution & Co. and Kellogg Class of 1980, could not believe his ears. "You can not mean that," he said in response to a reduced rate of Doug Braunstein, JP Morgan head of investment banking, client Parr, the legendary investment bank Bear Stearns. Less than eighteen months after the auction for all-time high of $ 172.61 per share, the bear now had no choice but to accept the humiliating Morgan $ 2 per share, the Federal Reserve authorized rescue proposal. "I'll get back to you." After hanging up the phone, Parr leaned back and gave a sigh of exhaustion. Rumors had swirled around Bear as long as his two hedge funds blew up in the sub-prime housing crisis, but again and again, patchwork bear seemed storm. Parr efforts to find capital injections for banks led to a long discussion, and marathon sessions due diligence, but one by one, potential investors backed away, scared off some significant reserves bear mortgage while every bank on Wall Street was to reduce their positions and taking massive write-downs in asset class. Last week, those rumors came to a head, with financial analysts openly questioned the ability of the bear to continue the work and its clients running for the exit. Now on a Sunday afternoon, he had already been a long weekend, and it will almost certainly be a long night, the Fed supported rescue Bear require cumbersome negotiations, before the market open on Monday. By morning eighty-five-year-old investment bank that survived the Great Depression, the savings and loan crisis, and the dot-com implosion, would cease to exist as an independent company. Pause briefly before calling CEO Alan Schwartz and the other boards Bear Parr allowed himself a moment of reflection. How did all this happen? "Hide
by David P. Stowell, Evan Meagher Source: Kellogg School Management 25 pages. Publication Date: Mar 06, 2009. Prod. #: KEL378-PDF-ENG

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Investment Banking in 2008 (A): Rise and Fall of the Bear

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