Open Access (free)
Oonagh McDonald

Professional standards for the valuation of commercial and residential real estate existed at that time of Mayer Lehman Brothers' bankruptcy. However, bankruptcy Examiner Valukas demonstrates that Lehman showed little interest in conforming to them or hiring those who knew how to apply them. This chapter sets out the difficulties of valuing both complex financial instruments and real estate, and especially commercial real estate and development land. It describes the methodologies used to value commercial real estate and complex financial instruments. The chapter draws on the procedures as set out by the Royal Institution of Chartered Surveyors in London, and the Appraisal Foundation, which sets the Uniform Standards of Professional Appraisal Practice (USPAP), the standards required by the Financial Institutions Reform, Recovery and Enforcement Act 1989. It also examines some major derivatives in force when Lehman's collapsed, including collateralized debt obligations (CDOs) and collateralized loan obligations (CLOs).

in Lehman Brothers