Last week, the creditors’ committee representing what’s left of the now-defunct Lehman Brothers asked bankruptcy Judge James Peck to force Treasury Secretary Timothy F. Geithner, who was President of the New York Fed at the time of Lehman’s bankruptcy, to answer a few questions.
It turns out that the original subpoena issued by the committee to Geithner last August was ignored, so now the committee is appealing to the judge.
The committee says Geithner played a key role in Lehman’s collapse and may have “unique” knowledge about a last-minute transfer of some $8 billion out of Lehman Brothers into JPMorgan just before the collapse heard ’round the world.
Lehman is currently suing JPMorgan in an attempt to reclaim those funds and Geithner’s testimony is critical…and time is quickly running out. The discovery period for the committee ends on March 16.
According to the committee, JPMorgan did a “last-second collateral grab” in order to save itself while inflicting fatal damage on Lehman at the same time – and they claim that Geithner was in on it.
The week before Lehman collapsed, Geithner made 35 phone calls to then-Lehman CEO Richard Fuld and another 10 phone calls to JPMorgan’s CEO Jamie Dimon. At least some of those calls, said the committee, centered on those collateral demands.
Therefore, the committee is insistent that Geithner should be forced to reveal what those calls involved.
The estate and its creditors say they aren’t seeking to ask Geithner about the New York Fed’s internal discussions about its response to the Lehman situation, and that they’re seeking only to ask him about his conversations with nongovernment individuals like Dimon.
Thus far, though, the Treasury hasn’t committed to making Geithner available for a deposition.
Geithner has remained silent on the matter.
Anthony Coley, a spokesman for the Treasury Department, said he could not fathom what all the fuss is about.
“Treasury and the Fed have provided thousands of pages of documents and arranged for depositions of numerous other witnesses,” Coley said. In light of all that disclosure, Coley added, “it is unclear why the plaintiffs continue to insist on unnecessary depositions.”
The Lehman estate has also sought the testimony of Geithner’s predecessor as Treasury secretary, Henry M. Paulson Jr.
Lawyers for the creditors said that they would address Paulson’s testimony in a separate filing.
Lehman’s Motion to Compel Geithner Testimony