Lehman Brothers

Lehman Brothers Inc.
Lehman Brothers
Company typePublic company
NYSE: LEH
IndustryInvestment services
PredecessorH. Lehman and Bro.
Founded1850; 174 years ago (1850)
Montgomery, Alabama, U.S.[1]
FoundersHenry, Emanuel and Mayer Lehman
DefunctSeptember 15, 2008; 16 years ago (2008-09-15)
FateChapter 11 bankruptcy Liquidation
Successors
Headquarters745 Seventh Avenue,
New York City, New York
,
United States
Area served
Worldwide
Key people
Products
Number of employees
26,200 (2008)
SubsidiariesLehman Brothers Inc., Neuberger Berman Inc., Aurora Loan Services, LLC, SIB Mortgage Corporation, Lehman Brothers Bank, FSB, Eagle Energy Partners, and the Crossroads Group
Websitelehman.com

Lehman Brothers Inc. (/ˈliːmən/ LEE-mən) was an American global financial services firm founded in 1850.[2] Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, and Merrill Lynch), with about 25,000 employees worldwide.[3][4] It was doing business in investment banking, equity, fixed-income and derivatives sales and trading (especially U.S. Treasury securities), research, investment management, private equity, and private banking. Lehman was operational for 158 years from its founding in 1850 until 2008.[5]

On September 15, 2008, Lehman Brothers filed for Chapter 11 bankruptcy protection following the exodus of most of its clients, drastic declines in its stock price, and the devaluation of assets by credit rating agencies. The collapse was largely due to Lehman's involvement in the subprime mortgage crisis and its exposure to less liquid assets.[6][7][8] Lehman's bankruptcy filing was the largest in US history, beating the previous record holder Enron,[9] and is thought to have played a major role in the unfolding of the 2007–2008 financial crisis. The market collapse also gave support to the "too big to fail" doctrine.[10]

After Lehman Brothers filed for bankruptcy, global markets immediately plummeted. The following day, major British bank Barclays announced its agreement to purchase, subject to regulatory approval, a significant and controlling interest in Lehman's North American investment-banking and trading divisions, along with its New York headquarters building.[11][12] On September 20, 2008, a revised version of that agreement was approved by U.S. Bankruptcy Court Judge James M. Peck.[13] The next week, Nomura Holdings announced that it would acquire Lehman Brothers' franchise in the Asia–Pacific region, including Japan, Hong Kong and Australia,[14] as well as Lehman Brothers' investment banking and equities businesses in Europe and the Middle East. The deal became effective on October 13, 2008.[15]

  1. ^ "History of the Lehman Brothers". Harvard University Library-Lehman Brothers Collection. Retrieved December 1, 2010.
  2. ^ Cite error: The named reference Bernhard5 was invoked but never defined (see the help page).
  3. ^ "Lehman Brothers declares bankruptcy". HISTORY. Retrieved July 6, 2020.
  4. ^ Wiggins, Rosalind; Piontek, Thomas; Metrick, Andrew (October 1, 2014). "The Lehman Brothers Bankruptcy A: Overview" (PDF). Archived from the original (PDF) on June 1, 2021. Retrieved July 6, 2020.
  5. ^ Melvyn Dubofsky (2013). The Oxford Encyclopedia of American Busgle.com/books?id=D-NMAgAAQBAJ&pg=PA470. Oxford University Press. pp. 470–. ISBN 978-0-19-973881-6.
  6. ^ Michael P. Malloy (2010). Anatomy of a Meltdown: A Dual Financial Biography of the Subprime Mortgage Crisis. Wolters Kluwer Law & Business. ISBN 978-0-7355-9458-6.
  7. ^ Asli Yüksel Mermod; Samuel O. Idowu (August 29, 2013). Corporate Social Responsibility in the Global Business World. Springer Science & Business Media. pp. 124–. ISBN 978-3-642-37620-7.
  8. ^ Williams, Mark (April 12, 2010). Uncontrolled Risk. McGraw-Hill Education. ISBN 978-0071638296.
  9. ^ Mamudi, Sam (September 15, 2005). "Lehman folds with record $613 billion debt". Marketwatch.
  10. ^ Williams, Mark (April 12, 2010). Uncontrolled Risk. McGraw-Hill Education. p. 178. ISBN 978-0071638296.
  11. ^ "Barclays announces agreement to acquire Lehman Brothers North American investment banking and capital markets businesses" (Press release). Barclays PLC. September 17, 2008. Archived from the original on December 13, 2013. Retrieved September 17, 2008.
  12. ^ "Barclays buys core Lehman assets". BBC News. September 17, 2008.
  13. ^ "Judge approves $1.3 billion Lehman deal". BBC News. September 20, 2008.
  14. ^ "Nomura to acquire Lehman Brothers' Asia Pacific franchise" (Press release). Nomura Holdings. September 22, 2008. Retrieved February 15, 2012.
  15. ^ "Nomura to close acquisition of Lehman Brothers' Europe and Middle East investment banking and equities businesses on October 13" (Press release). Nomura Holdings. October 6, 2008. Retrieved February 15, 2012.