Case Study Of The Collapse Of Lehman Brothers

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1. Introduction
158-years-old institution, the Lehman Brothers Holdings, Inc., Sought chapter 11 protections on September 15, 2008, indicating the largest bankruptcy filed in the U.S. history. The Lehman declared $639 billion in assets and $619 billion on debts, which surpassed the previous bankruptcy filed by Enron and WorldCom. The Lehman brother was 4th best-ranked U.S. Investment bank and globally 7th best investment bank before the collapse. An industry that had 25,000 employees worldwide crumbled into almost nothing within a week, which is one of the seminal events in the global financial crisis. The Lehman Brothers’ demise was a result of substantial attention to the U.S. subprime mortgage and the real estate markets that coaxed into …show more content…

Within decades of the Lehman Brothers’ prosperity, the industry also faced numerous challenges like the railroad bankruptcy of 1880s, 1930s the Great Depression, World War I&II, 1994’s capital shortage, and 1998’s Long Term Capital Management collapse and Russian debt default. The company stood strong during all this challenges and though it was able to recover from the previous challenges, the collapse of the United States housing market in 2008 brought the company to its …show more content…

The legal department was handling 60,000 claims and was thriving to pay off 360 billion dollars the company owes; therefore, company only have to pay back 18 percent of that value. The firm’s goal after the collapse of 2008 was to generate as much money as possible to pay off its creditors. After the bankruptcy the Lehman had a reputation in shreds and immensely reduced employees; however, at the end of 2012 the company made 21 billion dollars in cash. The firm is most likely to exist until 2017, the year they suppose to untangle all of their extremely large assets and pay off the debt

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