Thursday, March 11, 2010

Warren Buffett and Lehman 'Never Got Close' to Deal - Examiner's Report

Warren Buffett and Lehman Brothers "never got close to a deal" as the firm struggled to raise capital in March of 2008, according to a just-released history of Lehman's downfall.

Based on a September 22, 2009 interview with Buffett, the report says, "Two items immediately concerned Buffett during his (March 28) conversation with Fuld."

First, "Buffett took it as a negative that Fuld suggested that Lehman executives were not willing to participate in a significant way" by investing in the firm under the same term.

Second, Buffett thought Fuld's complaints about short sellers indicated a "failure to admit one's own problems."

At Fuld's request, Treasury Secretary Henry Paulson later called Buffett to "signal" he would like the billionaire to invest in Lehman, but Paulson "did not load the dice."

Buffett "cemented" his decision not to invest after reviewing Lehman's 10-K and learning of a "$100 million problem in Japan that Fuld had not mentioned during their discussions."
Excerpt From Lehman Examiner Report on Warren Buffett and Berkshire Hathaway