Lehman Brothers declared bankruptcy on September 15, 2008, intensifying the global financial crash. Its filing was the largest bankruptcy in U.S. history at the time and became a defining moment of the financial crisis.
Lehman had built a large business in mortgage-related securities and became highly exposed to the U.S. housing downturn. As house prices fell and defaults increased, investors questioned the firm’s solvency. Negotiations to find a buyer failed, and the company filed for Chapter 11 protection.
The bankruptcy damaged confidence throughout global financial markets. Credit tightened, financial stocks fell, and institutions became more reluctant to lend to one another. Barclays acquired much of Lehman’s North American investment-banking operations, while Nomura acquired major parts of its Asian and European businesses.
Bear Stearns had already been rescued and sold to JPMorgan Chase in March 2008, so it was not the institution that filed the September bankruptcy. The Lehman collapse is also distinct from the later government rescue of AIG.