This Day in the Law
September 15

Lehman Brothers Files Largest Bankruptcy in History (2008)

On September 15, 2008, Lehman Brothers filed for Chapter 11 bankruptcy and listed debts of $613 billion — the single largest bankruptcy filing in world history.

Lehman Brothers, a major Wall Street investment bank, listed debts its $613 billion as mostly unsecured debt owed to banks including such places as Hong Kong, New York, Singapore, Tokyo, and others. Lehman Brother filed Chapter 11 bankruptcy to reorganize its business structure — in contrast to a Chapter 7 bankruptcy which liquidates, i.e. dissolves, a business.

Lehman Brothers’ bankruptcy helped to spark the global economic recession — based in large part on the subprime loan crisis — fueled by greed and unsound lending practices. Lehman Brothers weren’t the only large corporation to file bankruptcy during the first decade of the 21st Century. Some other very large corporate bankruptcies include Washington Mutual with $327.9 billion in 2008, Worldcom, Inc with $103.9 billion in 2002, General Motors Corporation with $82.3 billion in 2009, and Enron with $63.3 billion in 2001.