Lots of people say the failure to bail out Lehman Brothers is what caused the credit markets to freeze, necessitating the $700 billion bailout:
Harvey Miller, the Weil, Gotshal & Manges partner leading Lehman's bankruptcy case, took the podium just after 11 a.m. and sought to explain why creditors need to be patient about getting their hands on internal Lehman records.
The bank never contemplated bankruptcy until Friday, Sept. 12, when it became clear that a proposed merger, possibly with Bank of America, wasn't going to happen. Even worse, the government decided to leave Lehman to fend for itself instead of offering a bailout. That gave Lehman no time to plan for its bankruptcy or get its documents in order, Miller said.
In a moment few in the crowd will forget, Miller told the court the government's decision to turn its back on Lehman showed "a lack of foresight" that reminded him of "the federal government's reaction to Katrina."
"That's how it will be recorded in the history books," Miller said.
http://amlawdaily.typepad.com/amlawdaily/2008/10/how-is-the-lehm.html
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