LONDON, ENGLAND - SEPTEMBER 24, 2010: An employee of Christie's auction house manoeuvres a Lehman Brothers corporate logo, which is estimated to sell for 1500 GBP and is featured in the sale of art owned by the collapsed investment bank Lehman Brothers on September 24, 2010 in London, England. The 'Lehman Brothers: Artwork and Ephemera' sale took place on September 29, 2010, on the second anniversary of the firm's bankruptcy, and comprises of artworks which hung on the walls of Lehman Brothers' offices in Europe. (Image credit: Getty Images Europe via @daylife)
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in May 2011, Claimant Lehman Brothers sought to recover by the close of the hearing $357,142.86 in outstanding principal; $79,244.88 accrued interest; and $53,571.43 in collection costs. Claimant alleged causes of action on the promissory note, breach of contract, and unjust enrichment.In the Matter of the FINRA Arbitration Between Lehman Brothers Holdings. Inc.. as assignee of Lehman Brothers Inc.,Claimant, vs. Adam David Sloan,Respondent (FIRNA Arbitration 11-01774, October 17, 2012).
Respondent Sloan generally denied the allegations and asserted various affirmative defenses.
The sole FINRA Arbitrator denied Claimant's claims.
You're right - pretty much a Vini, Vidi, No Vinciwrite-up as you could imagine but for the fact that it was Lehman Brothers (or what's left of it) and not Caesar. Notwithstanding the lack of detail, many industry folks are following these Lehman employee forgivable loan ("EFL") cases, which is why I report this outcome.
Once upon a time, way back when as it now seems, Lehman Brothers was one of the big four of Wall Street - alongside Goldman Sachs, Morgan Stanley, and Merrill Lynch. Then, life as we knew it, ended. And after the lives of far too many folks were upended - folks on Main Street and Wall Street - the corporations started the dirty job of calling in the loans. "Street Sweeper" has reported on Lehman Brothers, Inc.'s attempts to collect on millions of dollars in promissory notes that it had extended to a number of its employees:
In the once halcyon days of Wall Street, Lehman Brothers Inc. (LBI), the broker-dealer subsidiary of Lehman Brothers Holding, Inc. (LBHI), gave 113 of its employees about $80 million in loans. If you look at the dates of the promissory notes involved, they go as far back as 1998 and as recently as August 2008, just before Wall Street imploded. On September 15, 2008, LBHI filed for Chapter 11 bankruptcy, which was the largest in the nation's history. However, before that enormous blast, those 113 LBI employees managed to get about $700,000 each. . .
Comes December 2009, amidst the shards of what once was, LBHI entered into a stipulation with its debtors and LBI as part of the Securities Investors Protection Act (SIPA) liquidation of LBI. Based upon court papers, those 113 notes had a net balance due of about $51 million and were deemed to be LBHI's to collect. Pre- or post-Great Recession, no one is going to walk away from $51 million. "High Noon for 113 Former Lehman Employees" ("Street Sweeper" February 15, 2011).
Also see, "Lehman Seeks To Collect Unpaid Loans From Furious Former Employees" ("Street Sweeper", November 19, 2010).
I have made it a point of disclosing my bias on this issue. I don't like Lehman's efforts. I think it's victimizing victims and, frankly, unsavory, to say the least. As such, I root for those who lost their jobs to keep their loans, regardless of the legal issues involved. The likes of Lehman should be squeezing blood out of other rocks. In these days where firms such as Wachovia, Bear Stearns, Smith Barney, and others have all but vanished as we knew them, where the likes of JP Morgan, Knight Capital, and MF Global are bedeviled by a host of glitches and miscues, it irks me to see that there isn't more of a sense of fairplay in the industry - particularly when it comes to folks who intended to go to work but for the fact that their place of work no longer existed.
Tempering that position, I am also mindful that the creditors of LBHI were also victimized and that the recovered funds from the disputed promissory notes will benefit those individuals and entities; nonetheless, when I ultimately weight the merits of the battle between these two sets of victims, my sympathies generally fall into the camp of the former employees. Which is not to say that blood ought not be drawn from former in-house Lehman folks to restore the financial health of the firm's creditors. My position is go after the senior executives and board members, who were more culpable for causing the bankruptcy than the unemployed workers.