Chronicles Of Depression 2.0: #295: Lehman

Some interesting and disgusting points about the collapse and bankruptcy of Lehman Brothers.

Lehman’s Fired Staff Get 800 Pounds, Bonus Doubtful (Update1)

Oct. 1 (Bloomberg) — The 750 Lehman Brothers Holdings Inc. U.K. staff that lost jobs today are guaranteed 800 pounds ($1,426) under law and must line up with other creditors if they hope to get any of their discretionary bonus, lawyers said.

They’ve been told they will get their pay for the last month and they take their place with all other unsecured creditors,” said Ronnie Fox, London-based partner with Fox Lawyers, whose firm has received several calls from former Lehman professionals.

PricewaterhouseCoopers LLP, Lehman’s U.K. bankruptcy administrator, said yesterday that the jobs will be eliminated in Lehman’s European fixed income and personal investment management units. The bank employed about 4,500 in London’s Canary Wharf.

Former Lehman bankers, who generally earned at least 60,000 pounds a year plus a discretionary, performance-based bonus, are eligible for so-called statutory redundancy pay up to a maximum of 9,900 pounds after 20 years of service although that isn’t guaranteed. It could be years before it’s known whether money is left over for redundancy pay or bonuses, lawyers said.

Emphasis added by me.

It’s easy to jump to the conclusion that the greedy bastards deserve nothing. But I know people who have worked in Wall Street firms. They had nothing to do with trading. They were in support services. They also got year-end bonuses (at salary percentages that staggered me!). Those kind of people are getting screwed too now.

And it’s all “legal.”

Here is an astonishing statistic:

Lehman, Goldman Sachs Group Inc., Morgan Stanley and Bear Stearns Cos. paid about $50 billion in salaries, benefits and bonuses in 2007. The bonus portion, estimated at 60 percent of the total, rose to $29.8 billion from $26.1 billion.

There are entire countries in the world that don’t have that as a national budget!

And then there is this jaw-dropper:

Lehman’s $8B Transfer of Funds to US Irks Brits

(Newser) – An $8-billion transfer from Lehman Bros.’ European headquarters to its New York headquarters on the day the firm declared bankruptcy is raising issues on both sides of the Atlantic. As the sale of Lehman’s US operations to Barclays was approved Saturday, the administrators of the company’s bankruptcy filing in Great Britain were demanding that the money be returned, reports the Wall Street Journal, saying it belongs to clients and employees.

Emphasis added by me.

Say what? And this seems to be the other shoe of the pair:

NY Lehman Crew Gets $2.5B Bonus Pool

(Newser) – Some 10,000 New York Lehman Brothers employees will share bonus pay of $2.5 billion, sparking anger among the investment bank’s European workers and critics of unfair compensation in the imploding finance arena, the Independent reports. The money was arranged before Lehman declared bankruptcy. Lehman’s British staff, who are bracing for the loss of jobs or pay rates, called the bonus pay a “scandal.”

Emphasis added by me.

What the hell went on at Lehman’s? One report said this $8B was a “routine transfer.” Yeah — like the last helicopter on the roof of a hut during the fall of Vietnam!

The people in charge of Lehman knew the day they were filing for bankruptcy. Do they dare to try to declare ignorance of eight billion dollars?

Shit like this is not simply bad PR, it will increase the resentment and create an outright hatred of financiers of all kinds.

There is especially no place for shit like this during a crisis.

Explore posts in the same categories: C.O.A.T. - Belief, C.O.A.T. - Money, C.O.A.T. - Scams, C.O.A.T. - Self-Defense, Depression 2.0

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