Middlebury and Lehman Brothers

Before the financial crisis of 2008, Middlebury College had a long and beneficial relationship with Lehman Brothers, the financial firm that filed for the largest bankruptcy ever. Dick Fuld, the company’s CEO at the time it went bankrupt, served as a trustee of the College until last year. He also gave millions to the College (there’s no way to figure out how much exactly, but the total seems to be in the hundreds tens (edit see below) of millions). Lehman Brothers also had a practice of hiring a good deal of caffeinated Middlebury alumni bent on the 70-hour work weeks and big pay checks of the investment banking world. The Middlebury Campus has a good write-up of College’s relationship with Lehman Brothers here.

Fuld testifying before the House Oversight and Government Reform Committee on Capitol Hill on Oct. 6, 2008. Appropriated from Getty Images.

The Middlebury-Lehman liaison is old news at this point, but, buried in this recent piece (of what I think isn’t the most compelling journalism), is an indication of the impact of Lehman and Fuld’s collective collapse on the College:

Fuld is also said to have reneged on a $50 million pledge to Middlebury College. Shortly after Lehman fell, according to a source close to the school’s president, Ronald Liebowitz, Fuld told Liebowitz that he was worth only $100 million and would not be able to honor the commitment. Liebowitz did not reply to a request for comment, but a Middlebury official told Fortune that Fuld “did not renege on a formal pledge as far as I know,” but said it was possible that Fuld might have changed his mind about an “informal” pledge, and that in any event he was “a great trustee and very generous.”

Another aspect of this affair is that, following Lehman’s collapse, Fuld took a beating for his huge salary and management of Lehman.  For example, our 2010 commencement speaker Nicolas Kristof announced sarcastically that Fuld was “the winner of [his] annual Michael Eisner Award for corporate rapacity and poor corporate governance” while making a larger point about CEO compensation.

The Middlebury administration has not publicly criticized Fuld in any way. Fuld is no longer a trustee although his term was originally supposed to expire in 2013.

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One thought on “Middlebury and Lehman Brothers

  1. Just for the record, when the library was being dedicated, I believe Jim Davis was reported as the largest donor in Middlebury history, having donated something on the order of $77 million.

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