Lehman Brothers’ bankruptcy in September 2008 became a defining moment of the global financial crisis.
The investment bank filed for Chapter 11 bankruptcy protection on 15 September 2008, reporting roughly $639 billion in assets and $619 billion in debt. It was the largest bankruptcy filing in United States history at the time. The collapse intensified fear about banks’ exposure to mortgage-related securities.
Lehman had built a large business around real-estate finance and securitization before the U.S. housing market deteriorated. When confidence disappeared, the firm could not obtain enough financing to continue operating. The failure helped trigger a dramatic worldwide sell-off in equities and credit markets.
Bear Stearns had already collapsed earlier in 2008, but it was acquired by JPMorgan Chase with government assistance. Lehman Brothers was not rescued in the same way.