Lehman Brothers’ bankruptcy filing in September 2008 became a defining event of the global stock-market crash.
The firm filed for Chapter 11 bankruptcy protection on September 15, 2008, after suffering enormous losses tied to subprime mortgages and other real-estate investments. With more than $600 billion in assets, it became the largest bankruptcy filing in U.S. history at the time.
Lehman’s collapse intensified fear about the stability of banks and financial institutions worldwide. Credit markets froze, investors sold shares, and major stock indexes fell sharply during the financial crisis. The U.S. government had helped facilitate JPMorgan Chase’s purchase of Bear Stearns earlier in 2008, but Lehman did not receive a similar rescue.
Lehman’s bankruptcy is often confused with the failure of American International Group, or AIG, which received a U.S. government rescue the following day. The broader crisis also involved the collapse or forced sale of firms including Washington Mutual and Merrill Lynch.