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Lehman Brothers Goes BankruptPOSTED on September 15, 2008 NEW YORK - Lehman Brothers, one of the nation's largest investment banks, filed for Chapter 11 bankruptcy late Sunday night after negotiations over the weekend to sell the company failed to find a buyer. Lehman was hit hard by over $50 billion in losses primarily in mortgage-backed securities and faced a crisis in confidence along with a plunge in the value of its stock price. Lehman is the second investment bank to go under this year following Bear Stearns in March. The Treasury Department and Securities and Exchange Commission attempted to negotiate a buyout of the company with other financial companies but no deal could be made. The federal government refused to provide a bailout like it did with Bear Stearns after it collapsed in March. The bank was founded in 1850 and has headquarters near Times Square in NYC. Lehman is known for having the flashiest headquarters building with neon screens on the front facade. The firm employed 26,199 people worldwide at the end of the first half of the year. The bankruptcy filing seeks to continue paying wages and benefits to employees but it is likely most of them will lose their jobs. The bankruptcy is a stunning downfall for the firm which reported $4.2 billion in profits in 2007. The news on Wall Street continues to be sad for financial companes after Merrill Lynch, another investment banking giant, was bought by Bank of America for $50 billion Sunday and insurance giant AIG faces a mountain of debt problems. At the beginning of the year, there were five major investment banks in NY and now only two independent firms remain -- Goldman Sachs and Morgan Stanley. |