Too Big to Fail [320]
“Bob Diamond 3, John Varley 0”: Ringshaw, “Barclays’ Odd Couple,” Sunday Times.
trying to buy ABN AMRO: After a harrowing nine-month takeover battle, Barclays withdrew its bid of €67.5 billion for ABN AMRO in October 2007, finally conceding to a consortium led by the Royal Bank of Scotland. Julia Werdigier, “Barclays Withdraws Bid to Take Over ABN Amro,” New York Times, October 6, 2007.
been on the phone with Tim Geithner, and Hank Paulson twice about it: From Geithner’s calendar for Wednesday, September 10, 2008.
“Unless I’ve missed something”: Brian Blackstone, “Ex-Fed Official Poole: Fed Not Defining Post-Bailout World,” Dow Jones, September 10, 2008.
Any hope that the SpinCo plan was going to turn Lehman’s fortunes around: Susanne Craig, Randall Smith, Serena Ng, and Matthew Karnitschnig, “Lehman Faces Mounting Pressures,” Wall Street Journal, September 10, 2008.
announced his plans to “retire” from the firm: Mark Kleinman, “Jeremy Isaacs to Step Down at Lehman,” Daily Telegraph, September 7, 2008.
$5 million severance: Danny Fortson, “Five Lehman Chiefs Coop $100m Days Before Collapse,” Sunday Times, October 12, 2008.
“engage in detrimental activity”: From Exhibit A of Lehman’s “Termination Arrangements for Executives” in a section called “Restrictive Covenants.” Document was made public by the House Oversight and Government Reform Committee and is available online under “Materials for Lehman Brothers Compensation Meeting,” http://oversight.house.gov/story.asp?ID=2208.
pocketing some $540 million from an investment in Shinsei Bank: Matthew Miller, “Cash Kings,” Forbes, October 9, 2006.
town house on the Upper East Side for $53 million: Zachery Kouwe, “Sallie’s Suitor—Flowers’ Power: Art of the Deal,” New York Post, October 7, 2007.
Goldfield happened to be the banker depicted: Roger Lowenstein, When Genius Failed, 170–85.
Greenberg bought millions of preferred shares: In June 2008, Lehman sold $6 billion in common and preferred shares to a group of investors, which included Hank Greenberg. Greenberg would not disclose how much he spent. Lavonne Kuykendall, “Greenberg: Lehman ‘A Great Franchise,’ Now Has Enough Capital,” Dow Jones, June 10, 2008.
“Management did not successfully put to rest”: Patrick M. Fitzgibbons, “Lehman in Sale Talks as Survival Questioned—Sources,” Reuters, September 11, 2008.
“The change in rating agency posture”: Alistair Barr, “Treasury, Fed Reportedly Helping as Deal Sought by This Weekend,” MarketWatch.com, September 11, 2008.
“He is as feisty as ever”: Louise Story, “Tough Fight for Chief at Lehman,” New York Times, September 11, 2008.
buy Chicago’s LaSalle Bank from ABN: “ABN AMRO Shareholders Vote in Favor of Sale, Breakup,” Dow Jones, April 26, 2007.
“It is with deep regret”: Letter obtained by author.
had just gotten off the phone with Geithner: The Wall Street Journal reported that Willumstad made his first call to Geithner on Thursday, but they didn’t actually speak on the phone until Friday morning. Author’s subsequent reporting places the phone conversation on Thurs day morning. See Monica Langley, Deborah Solomon, and Matthew Karnitschnig, “Bad Bets and Cash Crunch Pushed Ailing AIG to Brink,” Wall Street Journal, September 18, 2008.
272 Greg Farrell, Aline van Duyn, and Nicole Bullock, “S&P in Warning after AIG Shares Plunge,” Financial Times, September 12, 2008.
The cost to insure the debt of AIG: Lilla Zuill, “AIG Woes Knock Its Market Value Below Peers,” Reuters, September 11, 2008.
Hank Greenberg, who was being deposed that morning: In the midst of settling a Delaware shareholder suit for $115 million, Greenberg began his deposition with Andrew Cuomo for a civil fraud lawsuit, which would stretch over the next several days. Amir Efrati, “Greenberg Settles AIG Shareholder Case,” Wall Street Journal, September 12, 2008.
“What the hell are you people waiting for?” James Bandler, “Hank’s Last Stand,” Fortune, October 7, 2008.
If the agency cut AIG’s credit