The Bankruptcy of Lehman Brothers


Summary: Lehman Brothers, one of the largest and most successful investment banks, was hit hard by the subprime mortgage crisis, as they held on to strong positions in subprime and other mortgage-related securities. In the first half of 2008, Lehman's stock price lost 73% of its value. A continuous loss of confidence in Lehman's ability to lend and pay back its debts. Finally, on September 13th,2008, Timothy F. Geithner, the president of the Federal Reserve Bank of New York, called a meeting on the future of Lehman, which included the possibility of an emergency liquidation of its assets. Finally, shortly before 1am in NY the next morning, Lehman Brothers Holdings announced it would file for Chapter 11 bankruptcy protection, citing bank debt of $613 billion, $155 billion in bond debt, and assets worth $639 billion. The morning of September 15 witnessed scenes of Lehman employees removing files, items with the company logo, and other belongings from the world headquarters at 745 Seventh Avenue. The spectacle continued throughout the day and into the following day.

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