On the Monday that the government handed Lehman Brothers its death sentence, the bank’s delegation left the New York Fed to return to Lehman HQ and tell the board the bad news.
And when they got back, they were shocked.
We found a description of the scene hidden in the FCIC report.
Harvey Miller, a bankruptcy counsel for Lehman described it like this:
We went back to the headquarters, and it was pandemonium up there— it was like a scene from [the 1946 film] It’s a Wonderful Life with the run on the savings and loan crisis. . . . [A]ll of paparazzi running around. There was a guy there . . . in a sort of a Norse god uniform with a helmet and a picket sign saying “Down with Wall Street.”…
There were hundreds of employees going in and out… Bart McDade was reporting to the board what had happened. Most of the board members were stunned. Henry Kaufman, in particular, was asking “How could this happen in America?”
Miller also told the FCIC that after the Fed told the Lehman delegation that they wouldn’t no receive a bailout, they were basically kicked out of the building.
Miller told the FCIC, Baxter told the Lehman delegation to leave the Fed offices. “They basically threw us out,” Miller said. Miller remembered telling his colleagues as they left the building, “‘I don’t think they like us.'”