Posted by LeGianT on September 15, 2008
Crisis on Wall Street as Lehman Totters,
Merrill Is Sold, AIG Seeks to Raise Cash
Moves Cap a Momentous Weekend for American Finance
September 15, 2008; Page A1
The U.S. government, which bailed out Fannie Mae and Freddie Mac a week ago and orchestrated the sale of Bear Stearns Cos. to J.P. Morgan Chase & Co. in March, played much tougher with Lehman. It refused to provide a financial backstop to potential buyers.
Without such support, Barclays PLC and Bank of America, the two most interested buyers, walked away. On Sunday night, Bank of America struck a deal to buy Merrill Lynch for $29 a share, or about $44 billion. Lehman was working on a possible bankruptcy filing that would allow most of its subsidiaries to continue operating as the firm is wound down.