Bear Stearns' Cayne was near death in September: report

NEW YORK (Reuters) - Former Bear Stearns Chief Executive James Cayne came close to dying last September from sepsis triggered by a severe prostate infection, Fortune Magazine reports on Monday on its website.

And though he survived his own brush with death, the veteran trader admitted he did not know how to save his 85-year-old firm, which collapsed six months later as Bear was unable to navigate the credit crisis that ultimately sparked a run on Bear by clients and investors.

"The options were limited," Cayne told Fortune in its August 18 edition. Bear posted its first-ever quarterly loss in December, shortly after his return from the hospital.

"When you become roadkill, when you happen to have lost some weight and you're not really healthy, but you know one thing -- you know that you have worked your ass off and you're not smart enough to know the answer -- that's tough," he said.

In Cayne's first interview since Bear was forced into a fire-sale takeover by JPMorgan Chase (JPM.N), he told Fortune he woke up on September 11 drowsy, weak and with dangerously low blood pressure. He rushed to a Manhattan hospital with sepsis so severe that doctors gave him a 50-50 chance of survival.

Though he remained in the hospital for 10 days and lost 30 pounds, Cayne and Bear never notified the public. He took a car service instead of calling for an ambulance to ensure his hospital visit didn't become public, Fortune said.

Cayne and Bear were under the gun last year as investors worried the Wall Street firm had excessive exposure to mortgage markets laid low by a slump in U.S. real estate. Its stock began to fall sharply in June 2007, when two of its highly leveraged mortgage funds collapsed.

Six months after his hospitalization, Bear Stearns itself succumbed as market panic sparked a run that drained all of Bear's cash in days. Cayne's reputation was tarnished as he was portrayed as a Nero fiddling around golf courses and playing cards even as the firm with 14,000 employees burned.

COULDN'T STOP THE FALL