Lehman Brothers’ bankruptcy became a landmark event in the global financial crash of 2008.
Lehman Brothers filed for Chapter 11 bankruptcy protection on 15 September 2008. It was the largest bankruptcy filing in U.S. history at that time, involving hundreds of billions of dollars in assets. The filing followed the collapse of the U.S. housing bubble and mounting losses connected to mortgage-related securities.
Lehman’s failure shocked markets because the firm was deeply connected to banks, investors, and financial institutions around the world. Short-term lending became more difficult as institutions questioned the financial health of their counterparties. Stock markets then suffered further severe declines.
Bear Stearns had already been rescued and sold earlier in 2008, while Merrill Lynch was acquired by Bank of America during the same crisis. Those events are often grouped together, but Lehman Brothers was the firm that formally filed the landmark bankruptcy.