This Case is about INTERNATIONAL BUSINESS
PUBLICATION DATE: March 06, 2009 PRODUCT #: KEL378-HCB-ENG
Gary Parr, the deputy chairman of Lazard Frères & Co. and Kellogg class of 1980, could not believe his ears. “You can not mean that,” he said, responding to the lowered bid given by Doug Braunstein, JP Morgan head of investment banking, for Parr’s customer, renowned investment bank Bear Stearns. “I will need to get back to you.” Hanging up the telephone, Parr gave an exhausted sigh and leaned back. Rumors had swirled around Bear since two of its hedge funds imploded as an outcome of the subprime home disaster, but again and time, the scrappy Bear seemed to have weathered the storm.
In the previous week, those rumors had reached a fever pitch, with financial analysts challenging Bear’s ability to continue its customers and operations running for the exits. Sunday afternoon, it’d been a long weekend, and it’d probably be a long night, as the Fed-backed bailout of Bear would need onerous discussions before the market open of Monday.
By morning, the eighty five-year old investment bank, which had endured the Great Depression, the savings and loan disaster, and the dotcom implosion, would cease to exist as an independent company. Pausing before calling the remainder of Bear’s board and CEO Alan Schwartz, Parr permitted himself a moment of reflection. Had it occurred?
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