If a couple of hedge funds wanted to destroy Lehman Brothers, just wipe the company off the face of the Earth, no matter how storied and how well managed the place has been over the years, they could do it in a week's time. Maybe, given the precarious state of this stock market, they could assassinate Lehman Brothers overnight.
Mind you, the blueprint I am about to present doesn't work against every firm; it just works against every financial firm that has lost credibility by insisting that it is doing well and then failing to disclose that it hasn't been. That was Bear Stearns' real flaw, and it is Lehman's too. If you were to listen to Lehman's comments about how well it's been doing in the last year, until very recently, and contrast them with reports from Goldman Sachs, you would have thought that Goldman was on the ropes and Lehman was performing swimmingly. If you didn't look at the share count, you would think that Lehman had to be taking advantage of its declining share price and buying its stock as Goldman was sidelined and hobbled. Of course, the opposite is true: Goldman has been reporting monster good quarters, but it tries to disclose every single misstep and flaw in its portfolio while buying back stock hand over fist because it's so flush with capital. Lehman has been hemorrhaging cash as it financed a horrid portfolio of toxic mortgage paper both from here and in Europe and doesn't have a cent to retire stock; it's too busy issuing more of the stuff.
Read up on Lehman's woes in 2008: