HUW
MERRIMAN - The Conservatives used public money to bail out their
banking friends, when those concerns trading fraudulently or recklessly
should have been wound down, with their assets seized and redistributed
to creditors.
BT
MONOPOLY - TRANSPORT
COMMITTEE - CONSERVATIVE
ASSOCIATION - WEALDEN
COUNCILLOR
Huw
Merriman is the local member for Bexhill, Battle and Herstmonceux (known locally as Shit
Creek because of the proposed ground and surface water
debacle surrounding a proposed 70 house development feeding onto the A271).
We
are not the only ones a little concerned at the standards and morals of
Huw Merriman, where according to the BBC, the then Chairman of the
Bexhill and Battle Conservative Association was forced to resign to get
the MP to budge. A difficult decision for Huw, with a £160,000 dangled
in front of him.
BBC NEWS 27 MAY 2015 - Resignation over MP Huw Merriman's 'second job'
The chairman of the Bexhill and Battle Conservative Association has resigned after a disagreement with the newly-elected MP over a potential second job.
Stephen Rowlinson said he told Huw Merriman that continuing a £160,000-a-year consultancy with the liquidators of Lehman Brothers would be "damaging".
He said he resigned when "it became clear nothing would change his mind".
Mr Merriman said although he previously worked for the administrators he could not accept a new contract.
'Toxic Lehman name'
Mr Rowlinson said he had received an email from Mr Merriman saying he was considering an offer to continue working for the liquidators of the London and European operations of the US investment bank Lehman Brothers.
"This would be for at least a year at an annual consultancy fee of £160,000. He asked for my approval as chairman on behalf of the Association.
"I immediately responded by urging him not to take up the offer, pointing out that in the new parliament there would be just a handful of Conservatives and no Labour, Lib Dem or SNP members with any significant outside earnings."
He added: "I said that the combination of the toxic Lehman name, controversy about bankers' salaries and the government's drive to make £12bn welfare cuts would potentially make his second job extremely embarrassing for the government and damaging to his career."
"During an extensive exchange of emails it became clear that nothing would change his mind," he added.
But speaking to the BBC, Mr Merriman said he had previously lead a team of lawyers winding up the collapsed bank but had turned down the chance to continue the consultancy.
"Having now been elected as a Member of Parliament, and with the responsibilities to my constituents being my priority, I have concluded that I will not be able to assist the joint administrators," he added.
"Serving as an MP is an enormous honour and is a role which I look forward to doing with all of my focus."
EXTRACT FROM LEGAL WEEK - SEPT 10 2014 - HUW MERRIMAN ON WINDING UP LEHMAN BROTHERS UK
Monday 15 September 2008 was not a good day. The previous week, Lehman Brothers had reported a $3.9bn (£2.2bn) quarterly loss. Not, perhaps, a huge surprise, given the turmoil in subprime mortgage-related markets, but a big loss nonetheless. Over the past few months Lehman’s share price had fallen from almost $50 to under $5 as it faced up to a crisis of confidence and liquidity. But Bear Stearns had been rescued by JP Morgan Chase in March – with around $25bn (£14bn) of help from the New York Federal Reserve – so there was hope.
Over the weekend of 13-14 September, it seemed almost certain that Bank of America would bail out Lehman. Senior management anxiously awaited the knock at the door from Bank of America’s due diligence team.
They never showed up. They had gone to buy Merrill Lynch instead.
And so Monday 15 September became the day that would live on in the public’s memory as the day when Lehman Brothers staff walked out of their offices carrying their possessions in cardboard boxes.
Before dawn had broken, Lehman had thrown in the towel. In London the business known as Lehman Brothers International (Europe) – LBIE, pronounced ‘Libby’ – appointed PricewaterhouseCoopers (PwC) as administrators. Huw Merriman found out about it at 6.30am from his car radio. He was Lehman’s European legal head of capital markets contracts and he was about to become one of the most sought-after people in Canary Wharf as the bust investment banks’ counterparties tried desperately to protect their positions.
“My name happened to be on the [trading] contracts that LBIE had entered into before administration, not just in Europe but around the globe,” Merriman recalls. “So on day one I just got buried with termination notices. They all came to me.”
Within weeks, Merriman was made legal managing director. The role means that, while he now reports to head of legal David Swanson, he is in effect acting as the in-house lawyer to the PwC partners named as joint administrators of LBIE. For the last six years, Merriman has been leading a team of lawyers focused on getting creditor claims determined or litigated in court, working with Linklaters and other firms. “[We are] the guardians of the administrators’ legal risk,” he says.
Today – six years into administration – LBIE has reached the point where, because of the battles it has fought and won against counterparties and, indeed, other entities within the Lehman Brothers group, Merriman’s part of the failed bank, LBIE, is able to repay 100 pence in the pound – with billions left over for additional claims relating to interest charges and currency losses (creditors are getting 100 pence in the pound but perhaps not 100 cents in the dollar because of shifting foreign exchange rates). It’s an outcome that no one could have had any reason to expect six years ago.
From barrister to banking
From an early age, Merriman had wanted to be a barrister, but he soon found it wasn’t all that it was cracked up to be. “I found it quite an uncommercial and very old-fashioned place to work,” he says.
Ironically, given how things would eventually turn out, Merriman had spent part of his training representing a variety of banks and building societies that were suing surveyors and conveyancers as they tried to recoup losses they had suffered during the early-1990s property slump. It gave him an interest in banking that took him to his next job at Chase Manhattan, followed soon after by a move into a front office legal role at investment bank NatWest Global Financial Markets.
Merriman had developed a taste for structured products, so when NatWest decided in 2000 to scale back on investment banking, it was time for Merriman to move on again. Lehman beckoned.
At Lehman Merriman was working on credit derivatives, which were then still quite novel. “You didn’t need to be somebody with 20 years’ legal experience to actually work on it because it was [still] developing.”
In 2006 he was offered a new position heading a department called transaction management, which looked after the counterparty legal terms and legal risk, dealing with questions such as ‘how do we paper up our contract to make sure that we’re covered?’ He built up a team of 65 people based in London and elsewhere in Europe, as well as a team in Mumbai to reduce the bank’s cost base.
“Part of my role was being a lawyer. The other part was being a personnel manager because you’re managing a lot of people with their own support requirements, training, etc. A large part was also trying to deal with Lehman risk management,” says Merriman, who soon found himself missing the cut-and-thrust of working with people on the trading floor. But things were about to get a lot more interesting.
Disaster strikes
In March 2008 Merriman and his colleagues from Lehman and other investment banks were on a conference call with the Federal Reserve. “We were told by the Fed that under no circumstances were Bear Stearns to be closed down. Bear Stearns would be sorted out and looked after.” Ultimately it was picked up by JP Morgan Chase with huge financial support from the Fed. “Effectively they just strong-armed all of the investment banks to not panic,” Merriman recalls.
But he also remembers having a “gut feeling” that something just didn’t seem right. Bear Stearns was the fifth largest investment bank; Lehman was fourth and, he feared, next to go down. “But anybody I spoke to inside the bank just thought that was ludicrous. There was no way Lehman was going to fold and everything was absolutely fine.”
As market turmoil continued, no one thought to review the contracts that Lehman had in place to see if there was any legal contingency planning that could be put in place. “Nobody [senior] within Lehman Brothers ever asked us to look inward at what would happen if the inevitable – the worst-case scenario – occurred because to do so would be to acknowledge that the ship was going down. All the way up to the end we were told that everything would be fine.”
Merriman says that the rescue of Bear Stearns had given false hope as a dawning realisation took hold that things were very far from fine: “There was still an expectation that one of the other banks would step in for us.”
None did. And so Monday 15 September was not a good day.
“I’d never worked in a company where the entire organisation structure just broke down straightaway,” Merriman recalls. “You could only appeal to people who worked for you to just get their head down and work because people weren’t listening to you anymore.”
For the first few weeks, people fell into one of three categories: headless chickens, backstabbers jockeying for position in the event Lehman got sold, and those who, like Merriman, tried to take the view that you can’t control everything, “but what you can control is putting your head down, trying to work hard and keeping yourself together. “It was a fascinating time to watch and observe humans and their behaviour in challenging circumstances.”
Helping hands
No aspect of a lawyer’s training prepares them for this sort of meltdown. The experience of the administrators, however, was invaluable. PwC had worked on corporate failures such as Enron and MG Rover. “The management was brilliant from day one,” Merriman says. “They just wanted to support those individuals and give them what they needed.”
Merriman remembers going onto the floor where PwC and Linklaters had camped and introducing himself. “Someone said ‘you’re the guy who all the notices are coming through to’.” Paranoid counterparties wanted to ensure they had delivered termination notices straight to Merriman so they could close out their positions before markets “tanked”.
Merriman explained to the administrators what he was doing. “They listened and I came up with some ideas – perhaps that we needed some more staff just to set up spreadsheets and work out what positions to close out. They said ‘that all sounds great. How can we help you?’ It was very refreshing that nobody came in and said ‘stand aside, we’re in charge now’.
“There was no manual for how to deal with a bankrupt investment bank – the world’s largest bankruptcy – but the core values in terms of listening, trying to help and to empower were fantastic and, as a result, I found it a very easy relationship to work with.”
So Merriman and his team have spent the last six years chipping away at the contracts, countering claims where the other side has an inflated view of what it’s owed, while going like a terrier after organisations that owe money to LBIE – even if the other side happens to be another part of the Lehman Brothers empire (perhaps because of cash-pooling arrangements, for example).
“Litigation is something that we’re not afraid of,” Merriman says. “We’d rather not do it because it’s expensive and time-consuming but sometimes the actual threat of litigation shows that they need to come to the table and act.”
But he tempers that with a reminder as to what the litigation is all about: “We’re not going to court to try and make money. We’re just going to court to find out what the right answer is to ensure that we’re looking after the estate and the creditors as a whole.”
Legal lessons
There are at least three key lessons to come out of the Lehman saga from a legal standpoint. The first is that the contracts, as originally drafted before the crash, were inadequate. “They weren’t clear enough,” says Merriman, candidly. “But then, who would have thought it?” The contracts – broadly, industry-standard – gave the bank plenty of rights in the event that the counterparty defaulted, but left it exposed and with few rights to take control of the situation in the hitherto unimaginable circumstance that it was the bank that went bust, not the counterparty. “We were a complete hostage to fortune in terms of what the other parties were going to do,” Merriman says.
Another lesson is that more risk management attention needs to be paid to legal entities, rather than groups: “It’s all a question of what exposure the legal entity has. We always viewed the [Lehman Brothers] group as the most important because that’s what made us the money,” he explains. “Whereas when things go wrong you have to look at the legal entity. We didn’t focus enough on what would happen if LBIE had to be detached from the rest of the group.”
The third lesson follows on from that. “When the music stopped on 15 September there just was not enough information in our systems.” Information about contracts, assets, liabilities and pricing wasn’t all in one place. “It was incredibly difficult to work out what was where.” It’s vital to “make sure that each legal entity can actually account for itself”.
For Merriman, there was another personal lesson: “It’s just been fascinating. It’s all come out of difficult circumstances and I’m very aware of that. It was a humbling experience but actually I feel fortunate that I’ve been able to have such an interesting experience over the last six years from what, at the time, just seemed horrendous.”
The highlight for Merriman was in November 2012 when the administrators could pay the first dividend to creditors. “That’s when we realised that people really believed in what we were doing,” he says. “They wanted to sign up to our terms.” Now, LBIE is repaying 100 pence in the pound. “It’s been great to be able to pay everyone back. Maybe it indicates that actually the bank wasn’t in such a bad state as may have been reported at the time.”
That’s something to ponder when looking back at the photographs of all those Lehman bankers carrying their cardboard boxes.
DOWNRIGHT
DANGEROUS - We
pay our taxes but get no value for all our hard earned pounds. Don't
forget that our income is taxed along with just about everything we buy.
Even buying a house is subject to stamp duty and dying also costs money
with death duties. Shit! How are they getting away with bleeding the
electorate dry like this and not even providing roads without potholes.
CONTACT HUW
29-31 Sea Road
Bexhill on Sea
East Sussex
TN40 1EE
01424 736861
huw.merriman.mp@parliament.uk
At the time of its collapse, Lehman was the fourth-largest investment bank in the United States with 25,000 employees worldwide. It had $639 billion in assets and $613 billion in liabilities. The bank became a symbol of the excesses of the 2007-08 Financial Crisis, engulfed by the subprime meltdown that swept through financial markets and cost an estimated $10 trillion in lost economic output.
The Colossal Miscalculation
In February 2007, Lehman's stock price reached a record $86.18 per share, giving it a market capitalization of nearly $60 billion.5
But by the first quarter of 2007, cracks in the U.S. housing market were already becoming apparent. Defaults on subprime mortgages began to rise to a seven-year high. On March 14, 2007, a day after the stock had its biggest one-day drop in five years on concerns that rising defaults would affect Lehman's profitability, the firm reported record revenues and profit for its fiscal first quarter. Following the earnings report, Lehman said the risks posed by rising home delinquencies were well contained and would have little impact on the firm's earnings.
The Beginning of the End
Lehman's stock fell sharply as the credit crisis erupted in August 2007 with the failure of two Bear Stearns hedge funds. During that month, the company eliminated 1,200 mortgage-related jobs and shut down its BNC unit.
It also closed offices of Alt-A lender Aurora in three states. Even as the correction in the U.S. housing market gained momentum, Lehman continued to be a major player in the mortgage market.
In 2007, Lehman underwrote more mortgage-backed securities than any other firm, accumulating an $85 billion portfolio, or four times its shareholders' equity. In the fourth quarter of 2007, Lehman's stock rebounded, as global equity markets reached new highs and prices for fixed-income assets staged a temporary rebound. However, the firm did not take the opportunity to trim its massive mortgage portfolio, which in retrospect, would turn out to be its last chance.
Hurling Toward Failure
In 2007, Lehman's high degree of leverage was 31, while its large mortgage securities portfolio made it highly susceptible to the deteriorating market conditions. On March 17, 2008, due to concerns that Lehman would be the next Wall Street firm to fail following Bear Stearns' near-collapse, its shares plummeted nearly 48%.
By April, after an issue of preferred stock—which was convertible into Lehman shares at a 32% premium to its concurrent price—yielded $4 billion, confidence in the firm returned somewhat.
However, the stock resumed its decline as hedge fund managers began to question the valuation of Lehman's mortgage portfolio.
On June 7, 2008, Lehman announced a second-quarter loss of $2.8 billion, its first loss since it was spun off by American Express, and reported that it raised another $6 billion from investors by June 12.5
According to David P. Belmont, "The firm also said it boosted its liquidity pool to an estimated $45 billion, decreased gross assets by $147 billion, reduced its exposure to residential and commercial mortgages by 20%, and cut down leverage from a factor of 32 to about 25."
Too Little, Too Late
These measures were perceived as being too little, too late. Over the summer, Lehman's management made unsuccessful overtures to a number of potential partners. The stock plunged 77% in the first week of September 2008, amid plummeting equity markets worldwide, as investors questioned CEO Richard Fuld's plan to keep the firm independent by selling part of its asset management unit and spinning off commercial real estate assets. Hopes that the Korea Development Bank would take a stake in Lehman were dashed on September 9, as the state-owned South Korean bank put talks on hold.
The devastating news lead to a 45% drop in Lehman's stock, along with the firm's debt suffering a 66% increase in credit-default swaps.8
Hedge fund clients began abandoning the company, with short-term creditors following suit. Lehman's fragile financial position was best emphasized by the pitiful results of its September 10 fiscal third-quarter report.
Facing a $3.9 billion loss, which included a $5.6 billion write-down, the firm announced an extensive strategic corporate restructuring effort. Moody's Investor Service also announced that it was reviewing Lehman's credit ratings, and it found that the only way for Lehman to avoid a rating downgrade would be to sell a majority stake to a strategic partner. By September 11, the stock had suffered another massive plunge (42%) due to these developments.
With only $1 billion left in cash by the end of that week, Lehman was quickly running out of time. Over the weekend of September 13, Lehman, Barclays, and Bank of America (BAC) made a last-ditch effort to facilitate a takeover of the former, but they were ultimately unsuccessful.7
On Monday, September 15, Lehman declared bankruptcy, resulting in the stock plunging 93% from its previous close on September 12.
SHORT
CUT STONEWALLING - An MP owes a special duty to residents in their
geographical region. A failure en-masse, such as this blanket dismissal
of complaints, means that this Conservative Member of Parliament is
failing to do his job and represent the people, by not properly considering
matters put to him. There is no transparency or answerability, leaving
an MP operating like this free to do what he likes. This is hardly conducive to establishing
trust with the electorate, in line with the position of power that the
MP enjoys - so bringing the Parliamentary system into disrepute. Many
constituents do not have access to the internet and don't have email
addresses. They write to him, posting their letters using Royal Mail.
Anyone doing so, should be able to expect a reply in writing. We wonder
if it was this kind of short cut that in-part, caused the demise of
Lehman Brothers.
CABINET MPS -MARCH 2020
Boris
Johnson - Bozo
Prime
Minister
|
Rishi
Sunack
Chancellor
Exchequer
|
Priti
Patel
Home
Secretary
|
Dominic
Raab
Foreign
Secretary
|
Michael
Gove
Chancellor
D. Lancaster
|
Ben
Wallace
Defence
Secretary
|
Matt
Hancock
Health
& Social Care
|
Liz
Truss
International
Trade
|
Gavin
Williamson
Education
|
Oliver
Dowden
Culture
|
Alok
Sharma
MP
Reading West
|
Robert
Jenrick
Housing,
Local Gov.
|
Therese
Coffey
Work
& Pensions
|
Robert
Buckland
Justice
|
Anne-Marie
Trevelyan
International
Dev.
|
Grant
Shapps
Transport
|
George
Eustice
Environment
|
Brandon
Lewis
Northern
Ireland
|
Alister
Jack
Scottish
Sec. State
|
Simon
Hart
Welsh
Sec. State
|
Baroness
Evans
Leader
Lords
|
Amanda
Milling
Party
Chairman
|
Jacob
Rees-Mogg
Leader
Commons
|
Mark
Spencer
Chief
Whip
|
|
Suella
Braverman
Attorney
General
|
|
Stephen
Barclay
Treasury
Sec.
|
|
|
CONSERVATIVE
MPS 2017-2020
Boris
Johnson - Prime
Minister
MP
Uxbridge & South Ruislip
|
Rishi
Sunack
MP
for Richmond, Yorkshire
|
Grant
Shapps
MP
Welwyn Hatfield
|
Philip
Hammond
MP
Runnymede & Weybridge
|
Alok
Sharma
MP
Reading West
|
Damian
Green
MP
for Ashford
|
Gavin
Williamson
MP
South Staffordshire
|
Liam
Fox
MP
North Somerset
|
David
Lidlington
MP
for Aylesbury
|
Baroness
Evans
MP
Bowes Park Haringey
|
Jeremy
Hunt
MP
South West Surrey
|
Justine
Greening
MP
for Putney
|
Chris
Grayling
MP
Epsom & Ewell
|
Karen
Bradley
MP
Staffordshire Moorlands
|
Michael
Gove
MP
Surrey Heath
|
David
Gauke
MP
South West Hertfordshire
|
Sajid
Javid
MP
for Bromsgrove
|
James
Brokenshire
MP
Old Bexley & Sidcup
|
Alun
Cairns
MP
Vale of Glamorgan
|
David
Mundell MP
Dumfriesshire
Clydes & Tweeddale
|
Patrick
McLoughlin
MP Derbyshire
Dales
|
Greg
Clark
MP
Tunbridge Wells
|
Penny
Mordaunt
MP Portsmouth
North
|
Andrea
Leadsom
MP South
Northamptonshire
|
Jeremy
Wright
MP
Kenilworth & Southam
|
Liz
Truss
MP
South West Norfolk
|
Brandon
Lewis
MP
Great Yarmouth
|
MP
Nus
Ghani
MP
Wealden
|
Huw
Merriman
MP
Battle
|
Steve
Double
MP
St Austell & Newquay
|
Sarah
Newton
MP
Truro & Falmouth
|
Rebecca
Pow
MP
Taunton Deane
|
Jacob
Rees-Mogg
MP
Somerset
|
Gavin
Williamson
MP
Staffordshire
|
Thérèse
Coffey
MP
Suffolk Coastal
|
Caroline
Ansell
MP
Eastbourne
|
.
David
Davis
MP
Haltemprice & Howden
|
Claire
Perry
MP
for Devizes
|
Amber
Rudd
MP
Hastings & Rye
|
.
|
Theresa
May - former PM
MP
for Maindenhead
|
David
Cameron
Former Prime
Minister
|
John
Major
Former Prime
Minister
|
Margaret
Thatcher
Former Prime
Minister
|
LINKS
& REFERENCE
https://www.bbc.co.uk/news/uk-england-sussex-32891604
https://www.bbc.co.uk/news/uk-england-sussex-32891604
https://www.huwmerriman.org.uk