Lehman's NY staff to get $2.5 billion bonus; London staff scandalised

22 September 2008

Lehman's New York employees of the failed Lehman Brothers, described by Presidential candidate John Mcain as the bank with ''casino culture'', who aided in bringing the world's biggest corporate bankruptcy, were rewarded by their new owners – Barclays of London, with a $2.5-billion bonus bonanza, eliciting a furious reaction from their colleagues in London who were left high and dry by the company headquartered in New York, calling it a ''scandal.''

London-based Lehman Europe's 4,500 UK employees were out of a job after the company had been put into administration when it sought the Chapter 11 bankruptcy protection.

This bonus comes after Barclays Capital bought the US operation of Lehman Brothers for $1.75 billion, which included Lehman headquarters building in Manhattan and two data centres in New Jersey. They also took on 10,000 staff by asking them to resume work at the Manhattan headquarters today.

In the days leading up to Lehman's collapse, the US business took back all the cash held at its overseas subsidiaries. $8.2 billion held by Lehman's offices overseas was sent through London to its headquarters in the US via electronic transfer.

Lehman's European headquarters which is based in London often remitted money from its London HQ to its parent company in New York where the money kept overnight accrued interest and sent back the following morning to London.

On Sunday when Lehman filed for bankruptcy, Lehman Europe found that it was down by $8 billion as the money failed to arrive leaving the employees and creditors high and dry.