The sudden, chaotic bankruptcy of Lehman Brothers in September wiped out $75bn of value that could and should have been saved, if the bankruptcy filing had been more properly planned, according to the man administering the remains of what used to be the fourth-largest US investment bank.
Bryan Marsal, of the financial advisory firm Alvarez & Marsal, says that creditors who are owed a total of $200bn (£138bn) might have got close to half their money back if "fundamental rules of crisis management" had been applied.
Instead, according to the trading value of Lehman Brothers bonds still outstanding, creditors expect to get barely 10 cents on the dollar.
Alvarez & Marshal, which has 150 employees poring over the books at Lehman Brothers' offices in the US, was appointed at 10.30pm on Sunday 14 September, at the end of a weekend of crisis talks aimed at saving the company, and just hours before it made the biggest bankruptcy filing in US history.
The heads of the US Treasury, the Federal Reserve and all of Wall Street's major firms had failed to come up with a plan to save the company, and its bankruptcy sparked a financial panic that, by the following Thursday, threatened a full-on run on banks in the US.
Economists and market participants continue to debate whether the fall-out was so catastrophic that the US government should have funded a rescue of Lehman, as it did for Bear Stearns before it and for the insurer AIG and the rest of the banks later in the month.
Many in the market the previous week did not believe the Treasury's protestations that no government money would be used to prop up Lehman, even as it was becoming clear the company might go into a death spiral.
"While I have no position on whether or not the federal government should have provided further assistance to Lehman, once the decision was made not to provide further assistance, an orderly wind-down plan should have been pursued," Mr Marsal said in an interview with the Wall Street Journal. "This filing, which was pretty much dictated to the board of directors at Lehman that weekend, occurred with no planning. It was an unconscionable waste of value."
Alvarez & Marsal has prepared a report for bankruptcy court estimating the losses caused by the failure to run an orderly wind-down of the company, saying that $50bn was lost because of the sudden shut-down of its derivatives trading operations. The bankruptcy filing nullified some 900,000 derivatives contracts, including many where Lehman Brothers was owed money.
In addition, divisions which were sold off in the days after the filing, including the investment banking operations picked up by Barclays, fetched much lower prices because of the fire-sale nature of the deals, squandering tens of billions of dollars more that could have gone to creditors.