Lehman Brothers: Crisis in Corporate Governance Harvard Case Solution & Analysis

This case in detail desperate talks in September 2008 in order to prevent the failure of the New York investment bank Lehman Brothers. After the collapse of the subprime mortgage market in the U.S. in February 2007, the decline in global financial markets began to accelerate. Lehman Brothers, heavily exposed to the U.S. subprime mortgage and commercial real estate began to experience increasing levels of stress. Looking for a merger to save the company, Chairman and Chief Executive Officer Richard "Dick" Fuld began to actively seek a buyer for the company. Opposed by several potential suitors, Fuld instructed his lawyer to approach the Bank of America deal. Negotiations between Lehman Brothers and Bank of America followed and it was suggested by officials of the U.S. government. Negotiations between Lehman and Bank of America failed. After discussions with Barclays Bank of betting on Lehman also stalled, Dick Fuld has been isolated from the discussion and the officials of the U.S. government began to directly control the negotiations on the fate of Lehman Brothers. At the critical moment, the UK financial authorities denied the proposed deal to save Lehman. The Board of Directors of Lehman Brothers was monitoring the negotiations and met four times over the weekend of September 13th and 14th. During the fourth meeting of the American officer, addressed the board and said that the failure of Lehman Brothers would be in the interest of the nation. Council of Lehman Brothers are now faced with overwhelming dilemma. Lee continued to play for time, voting against the expressed desire of officials of the U.S. government, or to agree to the bankruptcy of "Hide
by Randall D. Harris Source: North American Case Research Association (NACRA) 22 pages. Publication Date: November 1, 2012. Prod. #: NA0176-PDF-ENG

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