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whole thing, you' re going to look like a hero."

Min was put off by Fuld's calls, and was alarmed at his continued insistence on dumping

the toxic assets on him, but nonetheless showed up for the 6 P.M. meeting, along with his

bankers and lawyers.

Fuld kicked off the conversation by reiterating that he believed KDB was missing an

opportunity by not taking on the whole company, all real estate included. It was the third

or fourth time that day he had tried to persuade Min, and the pitch was wearing thin.

One person in the meeting says, "Everyone in the room other than Dick looked

increasingly concerned" as Fuld talked. "Dick's going through this whole thing, trying to

sort of key up the same exact deal again to buy the whole company. And E.S. kept raising

objections, politely reminding Fuld that KDB was uncomfortable with the amount of

exposure, and Dick kept arguing with him. It was sort of incredible.

"KDB had already met with the whole Lehman team earlier about CleanCo, and had

reached a conceptual agreement. The Koreans thought they were all there to talk about, '

Are you prepared to accept our offer and move forward on a CleanCo deal?' Dick comes

in and tries to change tack."

Finally, Barancik spoke up, and tried to make it clear that KDB was concerned that the

real estate had not been appropriately marked to market. "KDB has already made the

decision that the only basis on which it is prepared to move forward is on the CleanCo

structure," he said bluntly.

Fuld fired back: "Have you really looked at this real estate and what it's valued at?" he

asked, incredulous. "If our marks aren't accurate, what should they be?"

Barancik said he was not commenting on the marks or drawing any conclusions. He

simply wanted to concentrate on the deal his client wanted to do: CleanCo.

To everyone's relief, McDade leaped in and produced a term sheet drawn up by the

lawyers.

"Look, Dick, we do have this term sheet--let's talk about the deal that we came here to

talk about," he said, and the term sheet was passed around.

Min looked at it and was surprised. It was a one-page document. And it was selling a

different CleanCo than the one they'd agreed to buy.

A person on Min's team recalls, "CleanCo wasn't totally CleanCo. In fact, CleanCo was

going to have some amount of assets . . . between, like, $5 billion and $15 billion of real

estate assets, that would be chosen by mutual agreement, some of which would remain

with CleanCo because they were nontransferable, and some of which the Lehman team

proposed be cherry-picked as providing attractive value to CleanCo."

The tension in the room was palpable. Fuld sat silent but scowling. Min was confused.

There were small clauses to haggle over, but the main problem was the elephant in the

room: namely, that CleanCo was no longer CleanCo. Until this was resolved,

negotiations could not continue.

Min and his advisers asked if they could step out for a minute to confer. In private, Min

made it clear that he'd had enough, that he felt Lehman was hiding something and

attempting to pass its problems to him. He said he was getting on the next plane to South

Korea. As far as he was concerned, the deal was dead.

But Barancik persisted: Would Min be willing to proceed with a deal that was truly

clean? One that resembled the deal discussed earlier in the day with McDade and

McGee?

Min said he was, then reentered the room and told Fuld and the others that he was flying

home, but that Barancik had been instructed to work with Lehman on coming to terms on

a deal.

Min rose to leave the table. Fuld was, at this point, slumped in his chair. He didn't try to

hide his anger. He said to his former employee, "So what do you mean, E.S.? You mean

you' re just walking out? You' re going to give up now? After all the work we've done

and after all the time we've been talking? You' re just going to walk out the door?"

There followed an excruciating pause. Would