Repo 105 Essay

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Board of Directors and Audit Committee did not know about Repo 105

Only a few top executives of Lehman knew about Repo 105; however, they did not disclose any information about Repo 105 in any reports or meetings. Neither the Audit Committee nor the Board of Directors knew about Repo 105. Most importantly, among eight members of Board of Directors except for the Chairman, most of them were in non-profit industry, and none of them was a financial service expert. The Board of Directors’ lack of experience caused them to fail to understand the complexity of financial markets and detect Repo 105. Meanwhile Richard Fuld, the Chairman and CEO, held 50% of beneficial ownership, and with his aggressive and risk-taking personality, he imposed the …show more content…

Valukas, Jenner & Block LLP as counsel, and Duff & Phelps, LLC as financial advisor.

On January 16, 2009, the United States Bankruptcy Court for the Southern District of New York delegated the U.S. Trustee to nominate an Examiner. The U.S. Trustee then appointed Anton R. Valukas as Examiner. Valukas graduated from a law school and then became an Assistant US Attorney. In 1985, Valukas was appointed as United States Attorney for the Northern District of Illinois, where he served for four years.

After being appointed as the bankruptcy examiner of Lehman, Valukas requested to employ Jenner & Block LLP as counsel and to employ Duff & Phelps, LLC as his financial advisors. The Court approved both requests. Jenner & Block is a law firm based in the US, which is active in corporate litigation, business transactions, the public sector and other legal fields. Duff & Phelps Corporation is a global valuation and corporate finance advisor. Its primary service areas include valuation, dispute consulting, legal management consulting, and Mergers & Acquisitions.

BANKRUPTCY AFTERMATH

Lehman’s bankruptcy was the largest in U.S. history; creditors suffered extensive

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