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For the lawyers officiating at the funeral of Lehman Brothers, the only thing more shocking than the investment bank’s sudden demise was the speed with which its most visible asset, the broker-dealer operation, was packaged and sold. It was over in less than a week. On Monday, September 15, Lehman filed for Chapter 11 protection at the U.S. Bankruptcy Court in Manhattan. Over the next five days, Lehman’s lawyers at Weil, Gotshal & Manges-more than 100, according to an internal memo-worked around the clock. The frenzy ended in the early hours of September 20, after a rowdy, marathon hearing that began the previous afternoon, when a weary Judge James Peck signed off on the sale of Lehman’s investment arm to Barclays Capital, Inc., for $1.35 billion. When the dust settled, the lawyers for Lehman creditors were left shaking their heads at the final sale price. “What happened to Lehman’s assets? Did they go up in smoke?” asks a partner at a firm representing a creditor. The lawyers who attended the sale hearing say they had never seen anything like it. By 3 p.m., an hour before the hearing was scheduled to begin, the courtroom was overcrowded and overheated. The court clerk and bailiff tried in vain to persuade people to move to one of two overflow courtrooms. (It was easier to breathe in those other courtrooms, but thanks to a subpar audio system, much harder to hear.) When the hearing finally began, Weil bankruptcy attorney Harvey Miller announced that substantive changes had been made to the terms of the deal. The brokerage, he said to audible gasps, had lost about half its value in the past 48 hours. Later, during a recess, when Judge Peck was out of the room, lawyers for the creditors shouted questions at Miller about the terms of the deal. Those terms kept changing. At one point, Judge Peck acknowledged creditors’ concerns that the purchase agreement included ambiguities unheard-of in a deal of this size. He replied that the deal was clear in its “broad outlines,” and, given the circumstances, that was good enough. Finally, after midnight, Judge Peck uttered the words that most expected. “I have to approve this transaction because it is the only available transaction,” he said. Most bankruptcy lawyers involved in the Barclays deal are taking it in stride. The broker-dealer’s biggest asset was its people, they say, and with every passing hour, more of those people walked out the door. “It is hard to second-guess the lightning-quick decisions that were made,” says Richard Levin, a restructuring lawyer at Cravath, Swaine & Moore, who spoke with the understanding that he was not commenting on behalf of his client Credit Suisse Group, one of Lehman’s creditors. “There was great uncertainty and no other apparent bidders.” The bankruptcy bar may be handling the filing with aplomb, but litigators being litigators, objections and lawsuits have already been filed by creditors and shareholders. No doubt, the suits will snowball for years to come. But for better or worse, the brokerage is gone. “The court felt it was its mission to save the businesses if it possibly could,” says Martin Bienenstock, a Dewey & LeBoeuf partner who represents creditor The Walt Disney Company. “Under all the circumstances, they were doing God’s work.”

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