Lehman Brothers filed for bankruptcy on September 15, 2008, intensifying the global financial crisis. At the time, it was the largest bankruptcy filing in U.S. history.
Lehman had accumulated significant exposure to mortgage-related assets and commercial real estate. As housing prices fell and credit markets tightened, investors became increasingly concerned about the firm’s balance sheet and its ability to raise funding.
The bankruptcy froze confidence across financial markets because Lehman was deeply connected to banks, insurers, investment funds, and other institutions. Its collapse was followed by emergency government actions, including the rescue of American International Group and the passage of the Troubled Asset Relief Program.
A common mix-up is confusing Lehman’s failure with Bear Stearns, which was rescued in March 2008 through a sale to JPMorgan Chase. Lehman was not rescued and entered bankruptcy instead.