Indeed, the report details the increasingly aggressive collateral calls that JP Morgan made in the days before Lehman's Sept. 15, 2008, bankruptcy filing.
On Sept. 11, for example, JP Morgan executives met and decided that the collateral Lehman had posted "was not worth nearly what Lehman claimed it was worth," the report says. The next day, JP Morgan asked for an additional $5 billion in collateral.
About that time, JP Morgan discovered that one of the securities posted by Lehman, an asset-backed security known as Fenway, was "worth practically nothing as collateral."
In the report, the examiner raised questions about whether JPMorgan had acted "in good faith" but also detailed an interview in which Dimon said he told Fuld in every conversation "that he did not want to harm Lehman."
The examiner found Lehman could have potential claims against JPMorgan, which is still holding about $6.9 billion of Lehman's collateral, and Citi in connection with collateral demands and guaranty agreements in Lehman's final days that hurt its liquidity.
"Lehman's available liquidity is central to the question of why Lehman failed," Valukas wrote in the report. A Citi representative said that while the firm was still going through the report "the examiner has not identified any wrongdoing on Citi's part."
JPMorgan declined to comment. The report described how Bank of America executives backed away from a deal to buy Lehman, lacking US government aid.
Bank of America's due diligence team concluded Lehman's commercial real estate valuations were too high, and identified $65 billion to $67 billion in assets the bank "would not have wanted at any price," the examiner's report states.
Many of Lehman's assets could not even eligible to be used as collateral by a Central Bank, according to the report. Valukas found that Lehman could make claims on assets held by Lehman affiliates that were transferred to Barclays Plc when the British bank ultimately bought Lehman's core US brokerage after it filed for bankruptcy.
But the examiner said the value of those assets, such as office equipment and customer information, "may not be material." Lehman's estate has sued Barclays, alleging that it reaped a secret $5 billion profit from its rushed purchase of the company's US brokerage. Lehman is also entangled in litigation with Bank of America.
Barclays declined to comment and a Bank of America spokeswoman said the company would have no comment on the Lehman examiner's report until its staff finished reading the document.
Under US bankruptcy law, an examiner can be appointed in any bankruptcy case if someone requests it and the court finds the company's debts exceed $5 million.
Lehman had over $600 billion in assets when it filed for bankruptcy. The case is In re: Lehman Brothers Holdings Inc, US Bankruptcy Court, Southern District of New York, No. 08-13555.
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