Normally that would be the case. And it was that case with WaMu... the ones who schemed and 'precipitated' the 'Run on the Bank' with WaMu - JPMC FDIC and AAOC, did it with the intention of grabbing the Assets of WaMu.(and behind the scenes, they had acquired majority stakes in its Debt, while publicly they were running its stock price down to force it down into BK). But with Lehman it was quite different...I don't want to go into a lengthy history of how Lehman became a formidable competitor to GS, MS, JPMC and Merryl Lynch but suffices to say that LB ended up taking most of the 'Bonds Business' on Wall St. which forced GS & MS to depend on 'Trading' & IB/M&A for their major revenues and then started taking also the IB business from them. Then with the housing boom, it became the largest Warehouse lender. So, Hank P and his buddies at GS and other IBs ('Elites') exploited the Financial crisis to take out their arch rival by simply closing it off from accessing TARP, a facility that was given to every other Wall St bank except Lehman. It was an intentional & deliberate act. So, obviously they had no intention to see Lehman survive again, hence they did not take any major stakes in its Debt etc. What they didn't know was the extent of its MBS positions and its Real Estate "Collateral' it had built up, just to keep up its pre-eminent 'Warehouse Lending Franchise' to support all Mortgage Lenders across the country. So, only later after BK, the Hedge Funds realized the true picture to swoop in and buy up Lehman Debt, across all its entities -Elliott Capital & King Street being the bigger ones, amongst the Hedge Funds that bought up LB's and its subsidiaries Debt.
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