Caretaker offices in the US and abroad have continued to oversee payments to the company's creditors. remained in liquidation before the Bankruptcy Court for the Southern District of New York. The government and the Federal Reserve system responded with several emergency measures to contain the panic.Īs of May 2022, parent company Lehman Brothers Holdings, Inc. Money market mutual funds, a key source of credit, saw mass withdrawal demands to avoid losses, and the interbank lending market tightened, threatening banks with imminent failure. It signaled a limit to the government's ability to manage the crisis and prompted a general financial panic. The bankruptcy triggered a 4.5% one-day drop in the Dow Jones Industrial Average, then the largest decline since the attacks of September 11, 2001. history, involving more than US$600 billion in assets. These discussions failed, and Lehman filed a Chapter 11 petition that remains the largest bankruptcy filing in U.S. After the financial services firm was notified of a pending credit downgrade due to its heavy position in subprime mortgages, the Federal Reserve summoned several banks to negotiate financing for its reorganization. The bankruptcy of Lehman Brothers on September 15, 2008, was the climax of the subprime mortgage crisis. Lehman Brothers headquarters in New York City, one year prior to bankruptcy 2008 bankruptcy of American investment bank
