There are a number of books written about Lehman Brothers – most focus on the executive suite for very good reasons. Lawrence McDonald a former VP of distressed debt of Lehman Brothers wrote a book called A Colossal Failure of Common Sense The Inside Story of the Collapse of Lehman Brothers , Crown Publishing, NY, 2009.

The executive suite wanted to be at any cost to be a top tier company, for Lehman was traditionally seen as second tier company. Second tier is similar to the old Avis car rental company – we try harder. Second tier allows for a culture to exist of us against the establishment, meaning there is some resentment against the first tier companies.

In terms of his job, Mr. McDonald and group had to understand the companies he would short in terms of what value would the company be worth if it went into Chapter 11 bankruptcy – 5 cents on the dollar? 30 cents? 50 cents? When a company moves to the path of reorganization through Chapter 11 bankruptcy, there are funds which are not allowed to hold them in their portfolio. The companies have to sell and the issue is what price is good while the company works to come out of Chapter 11? There is a buying opportunity if you know what the assets should or could  be worth. To know the answer means a doing research.

Linking to dividend producing stocks – just about every President says they want to be world class or ranked number one – what does that mean? what type of growth does that imply? what type of debt does that carry? is it feasible in your eyes?

In every organization, there are people who understand what is happening, what needs to be done and if listened to would have made a difference.However getting to the executive suite and listening to different view points are often two different skills, which skills does the executive suite in your companies have?

There are more questions than answers, till the next time – to raising questions.