Lehman Brothers’ bankruptcy marked a major turning point in the 2008 stock-market crash.
Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. It was the largest bankruptcy filing in U.S. history at that time, with more than $600 billion in assets listed. The filing intensified fear about the health of banks and the global financial system.
Lehman had accumulated large exposures to mortgage-related assets and relied heavily on short-term financing. As housing prices fell and mortgage losses grew, investors became less willing to lend. The firm could not secure a private rescue or government-backed acquisition before filing.
Bear Stearns had already been rescued and sold to JPMorgan Chase in March 2008, while Merrill Lynch agreed to be acquired by Bank of America around the time of Lehman’s failure. Those events are often confused, but Lehman was the major investment-bank bankruptcy.