Chapters 12-13 Summary and Analysis

Lehman's difficulties escalate as they are described in Chapter 12. Despite attempts to keep the talks secret, news leaked of the failed negotiations with the Korean bank and soon the financial media were reporting that the firm had little time left to find a solution. Dick Fuld was under increasing stress, particularly because the quarterly earnings report was scheduled for the end of the week at which Fuld would have to announce a loss of $3.9 billion. Henry Paulson and his Treasury staff put heavy pressure on Fuld to talk to Ken Lewis at Bank of America, who had expressed some interest in purchasing Lehman at the right price. CEO of Bank of America Greg Curl agreed to look at Lehman's books with an eye toward making a deal, but in return asked the Treasury department to help him get more...