Lehman Brothers’ bankruptcy on September 15, 2008 became a symbol of the global financial crash.
Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection after failing to find a buyer or secure enough support to remain solvent. With about $639 billion in assets, it was the largest bankruptcy filing in U.S. history at the time.
The firm had built substantial exposure to mortgage-related securities and real estate. As the U.S. housing market weakened and losses mounted, confidence in Lehman deteriorated. Its failure intensified a credit freeze because financial institutions became less willing to lend to one another.
The bankruptcy was one part of a wider crisis involving subprime mortgages, complex securitized debt, bank failures, emergency rescues, and a severe global recession. Bear Stearns had already been rescued in March 2008, while Merrill Lynch agreed to be acquired by Bank of America on the same day Lehman filed.