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Lehman Brothers Bankruptcy Case Study

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Introduction In the tidal waves of business life, several corporations go bankrupt. Bankruptcy basically pertains to the legal status of an individual or entity that fails to repay the debts it owes to the creditors. In most of the jurisdictions, the court orders impose the bankruptcy and is initiated on a petition filed by the debtor on behalf of the creditor (in only few instances). In this way, we can say that bankruptcy is a legal proceeding that involves a person or business which fails to repay its outstanding debts. Here all the assets of debtors are measured and evaluated and ten these assets are used to repay a certain amount of the outstanding debt. On a successful completion of bankruptcy proceedings the court relieves debtor …show more content…

In the tidal waves of business and consumer bankruptcies, those who have taken a bankruptcy plunge must know that they are not the only ones being victim of the same as the history shows the instances of huge bankruptcies faced by the market leaders such as WorldCom and Washington Mutual Company. In this report, a particular case of bankruptcy while keeping in focus the Lehman Brothers Holdings Inc. Bankruptcy occurred in year 2008. The company. By collecting data from a variety of authentic sources, it has come to light that the storied investment bank fell prey to credit crises. Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection on September 15, 2008. This filing is considered among the largest bankruptcy filing in the history of United States with the Lehman Brothers Holdings Inc. over $ 600 billion of their assets. The purpose behind investigating Lehman Brothers Holdings Inc.’s bankruptcy case is to understand the underlying reasons leading the company towards such a drastic situation and also finding the ways through which the company could save it …show more content…

On 15 September, 2008 Lehman Brothers filed for Chapter 11 bankruptcy protection. Collapse of this Wall Street institution completely shuttered consumer’s confidence at during a period of fragility. As an aftermath of this implosion, several questionable decisions were brought into limelight. An analysis of the case shows that there was a series of events along with several dubious choices were made by company’s executive management that led Lehman Brothers Holdings Inc. towards failure and an utter situation of demise ("The Death Of Lehman Brothers: What Went Wrong, Who Paid The Price And Who Remained Unscathed Through The Eyes Of Former Vice-President", 2013). A high leverage and high risk business mode followed by Lehman Brothers Holdings Inc. was similar to that of its peers. Almost all of the largest investment banks took on greater leverage so as to lead up to the crisis. This strategy was helpful for the company in pursuing a greater growth and increased profits also, while maintaining limited

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