The Last-Minute Money Grab

For Wall Street bashers and cynics, the episode seemed a fitting epilogue. Bankrupt Drexel Burnham Lambert acknowledged last week that less than two months before its demise the company began doling out $260 million in 1989 bonuses to employees. The size of the booty was more than twice the amount of debt on which Drexel defaulted before it collapsed on Feb. 13. Even more startling, a few still unnamed Drexel hotshots got bonuses of more than $10 million each in a year when Drexel lost $40 million.

The reaction to the last-minute payouts was swift and brutal, especially among Drexel creditors....