Less than two months after the investment banking firm he led collapsed in the largest bankruptcy in U.S. history, Lehman Brothers CEO and Chairman Richard Fuld transferred his $13.75 million ocean front estate in Jupiter Island, FL to his wife for just one Benjamin Franklin bill, Florida real estate records reveal.
The move is garnering attention for what might be Fuld's attempt to avoid creditors as he could face civil lawsuits in the future.
It sounds like Fuld is "trying to save as many assets as he can," said Palm Beach attorney Jeffrey Zane, who does not represent Fuld. The move, he added, is basically an interfamily transfer that was necessary because Fuld, as a non-resident of Florida, was not safeguarded by the state's homestead property laws that can protect a family home from creditors.
After failing to find a financial savior to save it from collapse - which was a partial consequence of its heavy involvement in sub-prime mortgage investments - Lehman Brothers filed for bankruptcy Sept. 15, 2008.
The transfer of the lavish home to Kathleen Fuld took place Nov. 10, 2008, according to public records, which came just over one month after Fuld faced scrutiny during a heated Congressional hearing.
The couple purchased the more than three-acre estate in 2004. Cityfile.com first reported the recent transfer from Fuld to his wife.
Florida attorney Eric S. Ruff told the New York Times that Fuld's transfer is "the oldest trick in the books." "It's common when you hear the feet of your creditor approaching to divest yourself," Ruff said.
Ruff also told the Times that the sale could be deemed fraudulent if Fuld's wife is determined to not have paid enough for the property, potentially paving the way for creditors who come wanting to collect.
Zane said that should any question arise surrounding the legitimacy of the transfer, the Fulds could argue the move was part of their overall estate planning and that the transfer date coincidentally "happened at the same time that [Fuld] was under so much glare or publicity."
Fuld did not immediately return a message left for him by ABCNews.com.
Many at Lehman blame Fuld for dallying while his investment bank went bust, taking risks with other people's money while he cleared over $40 million in salary and stock in the last year alone.
Fuld became the poster boy for Wall St. greed last October, when he stood before Congress and defended the $484 million he received in salary, bonuses and stock options since 2000. Fuld said that given the worthless stock of Lehman Brothers after its collapse, his actual holdings were closer to $350 million.
Fuld, who also owns a mansion in Greenwich, CT, a ski chalet in Idaho and a Manhattan apartment, told the Congressional panel that he took "full responsibility" for the bankruptcy of Lehman Brothers and "felt horrible" about it. But he also said he has yet to understand why the federal government helped to bail out the AIG insurance company and other investment banking firms, but did not do so a few days earlier to save Lehman Brothers.
"Until the day they put me in the ground, I will wonder," Fuld told the Congressional panel, seeming to seethe with anger.
"This is a pain that will stay with me the rest of my life."
In his opening remarks, Waxman lambasted both Fuld and Lehman.
Internal documents obtained by the committee, Waxman said, "portray a company in which there was no accountability for failure."