Lehman CEO talks about football, bankuptcy and financial reform

The chief executive officer of Lehman Bros. Holdings Inc. can still pack a room, although these days that room is more often than not a bankruptcy courtroom.

But there was Bryan Marsal, a self-described “old workout guy,” speaking to several hundred people Tuesday at La Salle University’s Economic Outlook event at the Union League of Philadelphia.

Marsal operates in a world “where the economy intersects with corporate success and failure,” Paul R. Brazina, dean of La Salle’s business school, said in his introduction.

Does he ever. As a founder of Alvarez & Marsal L.L.C., he has swooped into companies involved in some of the biggest corporate scandals: Arthur Andersen L.L.P., HealthSouth Corp., and now Lehman Bros.

As he told the crowd, turnaround, or crisis-management, firms get called in only when things are reasonably dire. So it can be a stressful job, if a lucrative one. Bloomberg News reported that Marsal gets paid $850 per hour for running Lehman.

Sunday nights are his time away from it all, he said. The rule in his house is don’t disturb him while he watches Sunday Night Football. A New York Giants fan, he said he almost canceled his appearance here after the Philadelphia Eagles’ comeback win in December.

As the Pittsburgh Steelers played the Cleveland Browns on Sept. 14, 2008, someone from Lehman Bros. was trying to reach him, Marsal said. But his wife did not interrupt the football reverie until a colleague at Alvarez & Marsal pleaded with her to get Marsal to call into the Lehman board meeting going on at the time.

When he did, he was told that Lehman Bros. would file for bankruptcy, and that the board wanted him to run it. Before taking any workout job, Marsal said, he tends to ask the same questions. He described the Q&A like this:

“I ask: How much advance work have you done on this?”

This phone call is the extent of it, is the reply.

“How much liquidity do you have?”


“How much time do we have before filing for bankruptcy?”

Two hours.

Generally, these aren’t the answers he likes to hear, Marsal said. But he was not about to shy away from the biggest bankruptcy in U.S. history. On Sept. 15, Lehman filed for bankruptcy, listing $639 billion in assets and $613 billion in liabilities.

He spent much of his speech criticizing how little effect recent financial regulatory reform will have on banks. There was massive confusion and a lack of coordination by regulators at the time of the collapse of Lehman Bros., he said.

Regulators remain outgunned by the investment banks and hedge funds they’re supposed to watch over. In terms of resources and ingenuity, the competition is “unfair” between a quant hauling down $1 million a year and a regulator not even making six figures, he said.

"When the fever is back," said Marsal, referring to roaring markets, there is no reason "another Lehman is not on the horizon."