The man who is unwinding Lehman Brothers

These days, it's awfully hard to get on Harvey Miller's calendar.

A 75-year-old lion of the bankruptcy bar, Miller has been consumed by the largest corporate liquidation in American history: Lehman Brothers, the storied investment bank that set off one of the most harrowing episodes in the financial crisis when it collapsed in mid-September.

Miller's workdays begin around 8 in the morning and, if he is lucky, end near 11 at night. This combative, outspoken lawyer says that some days don't seem to end at all, but merely expand into the next, dissolving into tense meetings and complicated hearings in overheated courtrooms.

Although Miller has been involved in landmark bankruptcy cases before — including those of Eastern Airlines, R. H. Macy and Global Crossing — Lehman's is in a class by itself because of volatile markets, continuing government investigations, the involvement of federal regulators and a possible wave of other corporate implosions.

From his perspective as Lehman's undertaker, Miller believes that the fallout from the firm's messy bankruptcy could have been avoided. Regulators could have stepped in, he says, not necessarily to save Lehman, perhaps, but to head off the meltdown that followed. "They totally missed it," he says. "Look what happened."When companies rushed to terminate contracts with Lehman, he says, investor confidence plummeted in just about everything — securities and the markets they trade on, corporate debts and the assets backing them, the power of the government and its readiness to use it. In the days after Lehman filed for bankruptcy, he notes, demand for corporate debt utterly evaporated.

The failure of a Wall Street firm poses its own special risks, because other companies that rely on it — such as counterparties to complex financial contracts known as derivatives — are all financially exposed to its collapse.

That's why Miller says it was crucial for the government to head off the wholesale termination by counterparties of all their transactions with Lehman before the firm was forced into bankruptcy. "If the Fed or the Treasury said, 'Let's say to Lehman, there's no bailout, we're not going to save the company,' they could have supported an orderly unwinding of all the transactions over a period of months," he says. "It probably would've cost the economy a lot less money."

THE severity of the economic downturn is leading many analysts to predict a wave of bankruptcies over the next year. And for bankruptcy experts and lawyers who specialize in the trade, all the bad news may be good news for their own business. For one firm in particular, it represents a windfall.

Weil Gotshal & Manges, the firm where Miller is a partner, is widely believed to be first on a short list to represent General Motors if it seeks bankruptcy protection. Ira Millstein, another partner at the firm, has long been a trusted adviser to GM's board.

Weil is also handling bankruptcy filings by Washington Mutual, Pilgrim's Pride, Sharper Image and others, and Weil lawyers say representatives of other teetering companies are calling all the time.

In addition to advising the American International Group, the insurance giant that needed a huge federal bailout to stave off collapse, Weil is handling 13 bankruptcy filings this year alone.

Still, none of the failures so far compare to Lehman's. The combined debt of the 13 bankrupt companies represented by Weil totals $684 billion, according to the firm, but a stunning $640 billion is owed by Lehman alone.

Lawyers involved in the case say it has been a brutal sprint, in which any delay can result in billion-dollar losses.

"Events move with the velocity that almost defies comprehension," Miller said in mid-September at a hearing at the United States Bankruptcy Court for the Southern District of New York. In one 24-hour period, he pointed out, Lehman lost $1.6 billion when the Chicago Mercantile Exchange closed out all of Lehman's positions.

Since Lehman filed for bankruptcy protection early in the morning of Sept. 15, the Dow Jones industrial average has fallen more than 18 percent. Investors worldwide have watched helplessly as billions of dollars they sank into stock markets have evaporated. Tens of thousands of people have already lost jobs in sweeping corporate cutbacks, and countless additional jobs are at risk.

With the fate of whole industries — financial services, automaking, airlines, retailers, real estate, media — looking shaky, demand for bankruptcy gurus is likely to remain high for some time.

For Miller, this moment offers an opportunity, but he does not want for glory, says Sandra Mayerson, head of the New York restructuring practice at Holland & Knight. "His reputation was secure without Lehman, but I think he lives for the thrill of his work," Mayerson says. "He didn't need a moment."