“Where’s Dick?” has been a question swirling around Wall Street ever since Monday morning when Lehman Brothers filed for bankruptcy. As I reported, there’s not been a word from the man who commanded the firm for 15 years and, as many now see it, leveraged it into the ground. Last night, finally, a “Dear Colleagues” letter popped into the mailboxes of Lehman employees (at least those whose e-mail was still functioning). The note included three paragraphs or so. Fuld said that he felt “horrible” about what happened. The general response: anger, according to multiple sources.
While Fuld reportedly has been in his 32nd floor office at Lehman at least part of this week, he’s been invisible to employees, even senior managers. He wasn’t part of this week’s negotiations with Barclays , which agreed to buy a stripped-down portion of Lehman’s North American business for $1.75 billion. In Fuld’s stead: Bart McDade, his recently appointed No. 2, who worked out the deal with help from three other prominent Lehman executives: mergers-and-acquisition boss Mark Shafir, global investment banking chief Skip McGee, and Mark Shapiro, head of the firm’s restructuring and finance group. After a deal to sell Lehman in its entirety to Barclays collapsed last Sunday, this is a Hail Mary solution that should save the jobs of some 10,000 Lehman employees. That’s nearly a third of the firm’s total workforce.
While McDade, said to be looking 10 pounds lighter and unshaven this week, is now viewed as the man who rescued at least part of Lehman, the other savior on the scene is Barclays president Bob Diamond. He appeared at Lehman yesterday afternoon and reportedly told a gathering of employees that he has “a ton of admiration” for their businesses. He called Barclays’ acquisition “a once-in-a-lifetime opportunity,” scoring points by donning green cuff links — Lehman’s color.
Meanwhile, Fuld is expected to reapppear next week, in Washington. He’s been called to testify before U.S. Rep. Henry Waxman, the California Democrat who runs the House Committee on Oversight and Government Reform. Fuld is supposed to explain what led to Lehman’s collapse and explore the impact on financial markets and the U.S. economy. As my colleague Colin Barr pointed out yesterday, this is not a forum for image-remaking. Dick Fuld’s reputation is ruined, probably permanently.