Complexity in the ruins of Lehman

Lehman was too connected to be allowed to fail. Now a bankruptcy court is trying to sort through 1.5 million derivatives trades with 8000 counterparties...

WSJ: Lehman Brothers Holdings Inc.'s legal and financial advisers said Thursday they plan to hire about 200 professionals to help settle the more than 1 million derivatives trades the investment bank entered into before it collapsed last month.

Lehman attorney Harvey Miller said at a court hearing that advisers are working around the clock to understand Lehman's transactions in the wake of the "chaos" that resulted from its Sept. 15 bankruptcy filing, the largest ever in U.S. history.

Much of their work will focus on wading through about 1.5 million derivatives trades involving 8,000 counterparties. Lehman's chief restructuring officer Bryan Marsal of turnaround firm Alvarez & Marsal said about 210 financial professionals will be hired to unwind those trades.

Mr. Miller credited Mr. Marsal for his work so far, saying he has "brought order to this chaos." Alvarez & Marsal has 144 employees working on the Lehman matter along with 165 Lehman employees still working at the bank.

...Mr. Miller told Judge Peck he expects it will take 45 to 60 days before Lehman can answer numerous inquiries from creditors.