Do you work at Lehman? Did you hear Christian Meissner (LEH’s co-head of investment banking in EMEA) tell you in a London meeting this morning that you were on your own and shouldn’t expect to be paid?
Because he did, apparently.
The bad news doesn’t stop there either, Lehman employees. You may owe your former employer money. So much for limited liability. As reported by Credit Slips (HT Yves Smith):
Lehman paid out around $5.7 billion in bonuses in 2007. Are those bonuses safe? Maybe not.
The bonuses might be recoverable as fraudulent transfers– transfers made while insolvent without receiving reasonably equivalent value. (UFTA 5(a)).
Thus, the key question is whether Lehman was solvent when it paid out the bonuses? (The statute of limitations goes back past 2007, fwiw.) On an equity basis, almost assuredly yes, but on a balance sheet basis, that might be a closer call, depending on how things like MBS and CDOs are valued.
