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The Last of Lehman Brothers, May 18, 2022 Businessweek
The bank whose collapse marked the beginning of the 2008 financial crisis is only mostly dead. These are the people attending to its last remains ahead of its final court cases.

Daryl Rattigan arrived at Lehman Brothers 18 years ago for a three-month assignment from his law firm. Eventually the bank gave him a full-time job at its real estate finance arm in London.

Then the bank suddenly collapsed.

And he’s still there, almost 14 years later.

It turns out that when global financial institutions die, it can take a while. These deaths require caretakers. The spirit of a bank, even in life, is debt, and debts don’t settle easily into a grave. Most of the assets banks own are the debts of others: the mortgages, commercial loans, and IOUs payable to the bank. On the other side, of course, banks owe—to their bond- and note holders, counterparties in financial trades, and a long list of other creditors. Banks such as Lehman topple over when they suddenly can’t wring enough cash from their assets to meet their liabilities.

But even after the funeral, all the debts on both sides of the ledger are still there, and professionals are needed to sort out who has to pay up and who should be paid—professionals such as Rattigan, who’s spent years working to eke out value from property assets the bank held when it went under. On the morning of Sept. 15, 2008, in the hours after his employer filed for bankruptcy, Rattigan had no idea if he still had a job. He came into the office in London’s Canary Wharf, unsure of whether the doors would even be unlocked, to at least get his Rolodex. “In the back of your mind, you are also aware that there’s sometimes scope for people to be retained and help” with the cleanup, Rattigan says. “But if I was going to be retained, I had to get back in there and get my face shown.”

He got his wish. PricewaterhouseCoopers accountants, who had been brought in to pick up the pieces of Lehman’s UK arm, needed to tap a few people who knew where the documents were, where the value was, and how best to maintain it. Years after almost all of Lehman’s 5,000-strong London workforce has moved on—the line in their résumés becoming a talking point at job interviews—Rattigan is still making a living from the bank whose fall ushered in the greatest financial crisis since the Great Depression.

Featured in Bloomberg Businessweek, May 23, 2022. Subscribe now. Photo Illustration: 731; Photos: Alamy, Getty Images, Shutterstock
Like many people these past couple of years, Rattigan has spent long periods working from home. He had to push aside the clutter in his spare room and stick in a small desk to continue his work throughout the pandemic. For a while before the lockdowns, he used a serviced office space in Mayfair. It’s a posh neighborhood, “not somewhere you automatically assume a bust bank would go,” he says. But he says the accommodation was “far from luxurious.” In any case, he’s outlasted even that lease.

The scant corporeal remnants of Lehman—a few office spaces, some legal addresses—are scattered around the globe. There’s a holding company in New York that’s different from the European one Rattigan works for. The husk of that operation sits on the eighth floor of an elegant old building that once housed the uptown branch of the Bowery Savings Bank, before it became a fancy Cipriani catering hall. Lehman shares a floor with a health education company and a software startup.

Two court cases, one in London and the other in New York, are probably the last substantial issues that need to be resolved. They could linger for several more years, depending on appeals. But before the last contract is signed and the last rented office key is turned in, somebody might want to foot the bill for a goodbye cake and prosecco for Rattigan and others in a loose network of lawyers, accountants, consultants, and money managers. They’ve performed one of the weirdest jobs in finance: laying Lehman Brothers, finally, to rest.

The story of Lehman is a tragedy for the homeowners caught up in the risky mortgages the bank bet on and for the millions who lost jobs and economic opportunities in the grinding crisis that followed. But for a select group of people, the saga became the defining, even positive, turn in their careers.

There’s the federal judge who oversaw the collapse, for example. James Peck was a relative rookie on the bankruptcy bench when Lehman went under. Deep into the wee hours a few nights later, in front of an overflowing courtroom, he approved the hasty sale of the bank’s brokerage unit to Barclays Plc for $1.75 billion. That deal ensured the orderly transfer of hundreds of thousands of customer accounts, saved about 10,000 jobs on Wall Street, and possibly prevented the global financial system from spiraling further out of control. Peck, now 76, has since traveled the globe speaking about the case.

Complete article
https://www.bloomberg.com/features/2022-lehman-brothers-collapse-plan-repay-after-bankruptcy/?cmpid=BBD051822_MKT&utm_medium=email&utm_source=newsletter&utm_term=220518&utm_campaign=markets
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