The latest bright idea emanating from the office of Dick Fuld would seem to be a highly complex transaction involving warrants and call options and what have you. Take away the jargon, however, and the proposed deal seems quite simple: Lehman basically wants a high-interest, non-recourse loan, secured against its asset-management business.
I suspect it’s not going to happen — just as the $5 billion bail-out by the Koreans didn’t happen either. Fuld is in no position to dictate terms, and any potential buyer knows that the longer they wait, the better the deal they’re likely to get. Bear failed because it didn’t have friends when it needed them; we’ll find out soon enough how well-liked Lehman is. Does anybody really want Lehman to survive as an independent entity? That’s the big question now.