Adapted from The Last of the Imperious Rich: Lehman Brothers, 1844-2008 by Peter Chapman by arrangement with Portfolio, a member of Penguin Group (USA), Inc., Copyright 2010 by Peter Chapman.

The-Last-Of-The-Imperious-Rich

Fuld was out of his element. He was fine in the trading room, but hewas not a meetings man. If he had a cogent answer in his head, he didnot know how to formulate it in convincing sentences. "I don't know howI made it over the last five years," he replied. He was also unclear aboutthe future. He had "hired some people," he said, to study the matter. Thepartners were shaken. If Fuld did not know where the capital was goingto come from, who did? Glucksman tried to explain it away by pointingout that Dick had a problem communicating.

Partners were also concerned about Glucksman's behavior. He had gonein for a radical change of image, having shed seventy pounds, divorced hiswife, and bought a sporty convertible. He purchased a five-room apartmentin a block of luxury towers by the Museum of Modern Art, within astone's throw of Bobbie Lehman's old mansion on West Fifty-fourth Street.Around the financial district, he was boasting that he was the toughestguy on the street. He shocked one visitor to his office by suddenly pickingup a small ax and plunging it into his wall. Other marks on the wallsuggested this was not the first time.

As partners left the firm, those remaining pressured Glucksman, sayingthat he should be looking for an outside partner--another firm, but onewith money to spare--to put in capital. In March 1984 word got into Fortune magazine of the firm's internal divisions, and that Lehman Brothers partners were busy "peddling the firm." Glucksman's hand was forced. Ifuncertainty about the firm's future continued, an outsider could just stepin and buy it for a song.

American Express showed an interest, and in April, Glucksman begannegotiations at American Express's offices just across the plaza from 55Water Street overlooking the harbor. The company, better known for itscredit cards, had recently bought Shearson, a large brokerage, and was nowcalled Shearson/American Express. Shearson was big but did not havethe pedigree and prestige of Lehman Brothers--precisely what AmericanExpress believed its latest operation could use. Shearson Lehman AmericanExpress would have that extra insertion of class.

Glucksman soon reported back to his partners that he had made a deal:The sale price was $380 million. All the partners would do very well fromthe sale of their shares in Lehman Brothers, which would make them multi -millionaires, and many could stay working for the new organization. Forsome this was not the point. Herman Kahn, who had become a partnerat the firm in 1950, told Ken Auletta his reaction: " To me, investmentbanking was a noble undertaking, whereby capital was used for socialpurposes as well as personal gain. . . . I wept."

Dick Fuld was distraught. "I loved this place," he said. Fuld had resistedthe idea of selling and, until the last, never believed it would happen.

It had, however, and in 1984, after only a few months in control, Glucksman and his followers had thrown Lehman Brothers' independence away.And as he shuttled the short distance from Water Street to AmericanExpress's offices while he negotiated the deal, Glucksman was only yardsfrom the point of Manhattan where Henry Lehman approached the shore140 years earlier.