It is easy to forget with the American media that there about 5, 000 people in Lehman's overseas operations. Easy to forget that there is a world outside New York, and one that is more profitable.
People in Lehman New York did not.
[Picture Courtesy: www.mirror.co.uk]
Apparently, $ 8.07 Billion was transferred from Lehman's European operations at Canary Wharf in London to Lehman's UK operation hours before Lehman filed Chapter 11. Times Online (UK) quotes Tony Lomas of Price Waterhouse Coopers (PWC), the administrator of Lehman's European operations, as he makes parallels with Enron:
"Both in terms of the impact of the loss of confidence and the complexity of the trading transactions, the interdependencies of the group companies, and the sweeping of cash into a holding company account, leaving subsidiary companies empty of cash at the point of collapse"
New York employees have been called for work, and about $2.5 Billion in bonuses has been ring-fenced as part of the Barclays deal. Bonuses? Well, for the first nine months when Lehman reported profits. Times Online further quotes a London- based Lehman employee:
“It’s an absolute scandal. I will never work for an American firm again. It looks like they are prepared to cut you off at the knees. Nobody from America has been in touch since we went into administration on Monday.”
Lehman: You are on your own, London [Times Online, UK]
Fury at $2.5 bn Lehman bonus [Times Online, UK]
The "betrayal" of London [Evening Standard, UK]
My week of hell at Canary Wharf [Times Online, UK]