I meant to write about this a few days ago but the situation had me so irritated I was having difficulty writing cogent thoughts about it, in any event here are some facts, figures, news items and commentary related to Lehman Brother's collapse.

First, here is a look at the contrast between their internal struggles and what they said publically:

(From the WSJ's Law Blog):

• On September 9, Lehman’s stock plunged 45% on news that a potential deal with Korea Development Bank fell through.
• As Lehman’s “clearing bank,” J.P. Morgan acted as the financial middleman between Lehman and its clients. Steven Black, co-CEO of J.P. Morgan’s investment bank, told Fuld that in order to protect itself and its clients, JPM needed $5 billion in additional collateral — over and above the $5 billion J.P. Morgan had demanded five days earlier, which had yet to be paid. Fuld persuaded Black to settle for $3 billion right away.
• That evening, top Lehman execs discussed the need to raise between $3 billion and $5 billion to shore up capital by early 2009. That evening, discussions with outside bankers about possible capital raising ended without any formal plan. Lehman execs arranged a conference call for the next day to announce earnings ahead of schedule and to disclose plans for a restructuring. The bankers counseled Lehman against holding the call, warning there were too many open questions about the firm’s finances.
• On next day’s conference call, the firm announced that it expected its largest quarterly loss ever, $3.9 billion, driven largely by declines in real-estate valuations. CEO Fuld said the firm intended to sell a majority stake in its investment-management division and would cut its dividend. Lehman executives didn’t say anything about needing to raise capital.
• On the call, a Deutsche Bank analyst asked whether Lehman would need to raise $4 billion as part of the plan. Lehman’s CFO, Ian Lowitt, replied: “We don’t feel that we need to raise that extra amount.” At another point, Lowitt said: “Our capital position at the moment is strong.”
• By Sunday, Sept. 14, Lehman, its lawyers and officials from the New York Fed determined that Lehman must file for bankruptcy.

Obviously the above could very well create some significant legal issues for various Lehman Execs, the WSJ's Law Blog discusses the subject here ,  you can read about an FBI Inquiry here and other investigations here.

Following on the above let's take an additional look at some of the issues Lehman was dealing with in its final days:

(From the WSJ): "In the weeks before it collapsed, Lehman Brothers Holdings Inc. went to great lengths to conceal how fast it was careening toward the financial precipice.

The ailing securities firm quietly tapped the European Central Bank and the Federal Reserve as financial lifelines. On Sept. 10, one day after Lehman executives calculated the firm needed at least $3 billion in fresh capital, the firm assured investors on a conference call it needed no new capital at all. Lehman said its massive real-estate portfolio was valued properly, but Wall Street executives who have seen it say it was overvalued by more than $10 billion. As hedge-fund clients began yanking their money from Lehman, the firm assured them it was on solid financial footing.

On Sept. 11, J.P. Morgan Chase & Co. effectively ended Lehman's campaign to appear strong. In its capacity as a middleman between Lehman and its clients, J.P. Morgan knew more about Lehman's predicament than most outsiders, and it didn't like what it saw. J.P. Morgan demanded from Lehman $5 billion in additional collateral -- easy-to-sell securities to cover lending positions that J.P. Morgan's clients had with Lehman -- repeating an unmet request from a week earlier, people familiar with the situation say.

It was a knockout blow.