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told him I was trying to piece together the "jigsaw" of events that led to the Lehman

bankruptcy. "Believe me," he said, "so am I."

On September 15, 2009, Fuld was reportedly "ambushed" at his Sun Valley home when a

reporter rang the bell and said she had an important "family matter" to discuss. Fuld

invited her in, and she pounced.

When she asked for a quote, he said, "Nobody wants to hear it. The facts are out there.

Nobody wants to hear it, especially not from me."

Joe Gregory also stayed out of public view. Reportedly, he sold his seven-acre estate in

Manchester, Vermont. Former Lehman employees were appalled to read about his stilllavish spending habits in magazines such as Vanity Fair. He may have lost approximately

$230 million in stock, but over the years he'd taken out at least that much.

Gregory's healthy portfolio was in stark contrast to the finances of many of Lehman's

26,000 employees, who lost everything. Everyone who worked there--from secretaries to

managing directors to the CEO--received half of their pay in bonuses, paid in Lehman

stock that could not be sold for at least five years.

Erin Callan was briefly saved by Rob Shafir, the former head of fixed income who had

mistakenly worn "business casual" to a Lehman off-site and had quit in February 2007

and jumped to Credit Suisse, where he ran the firm's American offices. In July 2008 he

recruited Callan to run hedge funds there, because he'd been impressed by her when she

had run that department at Lehman.

To the fury of former colleagues, Callan gave an interview to Fortune magazine in which

she insisted that she hadn't been forced out at Lehman. "It was clear in the 24 hours after

we announced second-quarter earnings that the market reaction was just terrible, and

there was a rising sense in the organization that a management change was needed. I went

back to my office and decided I was willing to step down," adding that she, "was lucky to

get out." She was implying, many thought, that she'd been very clever to get out when she

had--as if it had been her choice, as if she'd had no responsibility for what had happened.

"I couldn't believe it when I read that," seethed one former colleague. But her cocky

attitude came to an abrupt end as lawsuits against Lehman, its board, and senior

management flooded in. Angry investors wanted to know if they'd been sold a lie. All the

institutions that had invested in the firm in 2008 now alleged that the marks had been

false. Callan had been the CFO; she'd signed off on the financials and effectively

promised that the company was in good health when clearly it wasn't. This was now her

potential legal jeopardy.

She quit Credit Suisse, retired to her house in the Hamptons, and dated the fireman she'd

once bragged to her colleagues about. Friends said she had a breakdown of sorts. For a

woman whose life had been her work, it was a sad outcome.

In an ironic twist, Michael Thompson, her former husband, landed on his feet: He ran his

trading business and was happy.

Throughout 2009 the lawsuits against Lehman just kept rolling in. One board member

told a friend, "I think we' ll be in court forever over this."

By November 2009, the cost of retaining the various advisers and examiners necessary to

parse the many thousands of claims and counterclaims and go about the laborious work

of liquidating the firm had crossed the half-billion-dollar threshold, with no end in sight.

The official liquidators of the estate, the New York turnaround firm Alvarez & Marsal,

reaped the biggest chunk of those fees, having billed more than $200 million for about a

year's worth of the services of 125 of its employees. In one eyebrow-raising development

in June, it was widely reported that Alvarez & Marsal sold the rights to manage the firm's

deeply distressed real estate portfolio for $10 million to a group that included Mark

Walsh.

As per the requirements of the Securities Investor Protection Corporation, a liquidation