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that things were not going well for Lehman at the FRBNY.2815 Weil attorneys Miller, Fife, DannhauserandThomasA.RobertswenttotheFRBNYtorepresentLehman.2816 OnthewaytotheFRBNYmeeting,RobertsreceivedacallfromanotherWeilpartner saying that Citibank had been told that Lehman was being liquidated and was requestingthatWeilrepresentCitibank.2817 On September 14, 2008, the Federal Reserve issued a press release stating that “[t]he collateral eligible to be pledged at the Primary Dealer Credit Facility (“PDCF”) hasbeenbroadenedtocloselymatchthetypesofcollateralthatcanbepledgedinthe triparty repo systems of the two major clearing banks.”2818 Upon learning of the expansion of the PDCF window, Lowitt and Fuld initially believed that Lehman’s problemwassolvedandthatLehmanwouldbeabletoopeninEuropebyborrowing from the PDCF.2819 However, Lehman soon learned that it was not eligible to use the window.2820TheFRBNYlimitedthecollateralLBIcoulduseforovernightfinancingto the collateral that was in LBI’s box at JPMorgan as of Friday, September 12, 2008.2821 Thatrestrictionwasreferredtoasthe“Fridaycriteri[on].”2822 2815Examiner’sInterviewofHarveyR.Miller,Apr.23,2009,atp.7. 2816Id. 2817Id. 2818FederalReserve,PressRelease(Sept.14,2008),availableat http://www.federalreserve.gov/newsevents/press/monetary/20080914a.htm, Sept. 14, 2008, last visited, May26,2009. 2819Examiner’sInterviewofRichardS.Fuld,Jr.,Apr.28,2009,atp.13. 2820Id. 2821Examiner’s Interview of Robert Azerad, Apr. 20, 2009, at p. 5; Examiner’s Interview of Christopher Burke, July 7, 2009, at p. 3. An experimental allocation by Lehman to the PDCF on Monday morning 722 Fuld told the Examiner that on Sunday afternoon, Sirri, head of the SEC’s Trading and Markets Division, called Fuld and asked him to “promise [Sirri] one thing,”whichwasthatLehmanwouldnotfileforbankruptcyprotection.2823Notlong afterthatconversationwithSirri,McDadecalledFuldfromthemeetingattheFRBNY to tell him that “the Fed has just mandated that we file for bankruptcy.”2824 At the FRBNY,BaxtersaidthatLehmanneededtofilebymidnightthatnight.2825Millerasked why and objected that it could not happen by midnight.2826 He said that a Lehman bankruptcywould“bringgreatdestabilizationinthemarket,”“bringtradingtoahalt,” andresultin“Armageddon.”2827Inresponse,theGovernmentrepresentativestoldthe Lehman representatives that it was decided and there were cars available to return themtoLehman’sbuilding.2828 AfterLehman’sexecutivesreturnedfromthemeetingattheFederalReserve,the Board meeting resumed and discussed “the Fed’s direct and authoritative statements showedatleast$72billionofeligibleLehmansecuritiesbeingsweptintothePDCFsystem.Seeemail from John N. Palchynsky, Lehman, to Craig L. Jones, Lehman et al. (Sept. 15, 2008) [LBEXDOCID 076981];seealsoLehman,PDCFScheduleofEligibleSecurities(Sept.14,2008)[LBEXDOCID405695]. 2822Examiner’s Interview of Robert Azerad, Apr. 20, 2009, at p. 5; Examiner’s Interview of Christopher Burke, July 7, 2009, at p. 3. According to Azerad, this restriction prevented Lehman from posting the range of collateral to the PDCF that other firms were allowed to post after September 15, 2008. Examiner’s Interview of Robert Azerad, Apr. 20, 2009, at p. 5; see also email from Timothy Lyons, Lehman,toIanT.Lowitt,Lehman(Sept.14,2008)[LBEXDOCID070210](stating“thefedislettingthe othereighteenbrokerdealersfundamuchbroaderrangeofcollateralthanus”). 2823Examiner’sInterviewofRichardS.Fuld,Jr.,Apr.28,2009,atp.12. 2824Id.atp.13. 2825Examiner’sInterviewofHarveyR.Miller,Apr.23,2009,atp.7. 2826Id. 2827Id. 2828Id.atp.8. 723
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