IMPACT

At the time when LEH filed for bankruptcy, the Lehman Brothers’
worth was estimated at $639 billion while on the other hand the
Lehman Brothers were $613 billion in debt.

After the Lehman Brothers had filed for bankruptcy in the US, the
financial markets in the country nearly collapsed when the Washington
Mutual failed, a double tragedy for the American economy

Due to their extensive global imprint on the debt, equity and

derivatives markets, the Lehman Brothers had subsidiaries and
companies affiliated to the Lehman Brothers also filed for financial
insolvency hence catalyzing the traumatic as well as catastrophic effects
of the global economic recession on financial markets worldwide

The Dow Jones closed down just over 500 points (−4.4%) on
September 15, 2008, at the time the largest drop by points in a single
day since the days following the attacks on September 11, 2001.

Lehman's bankruptcy is expected to cause some depreciation in

the price of commercial real estate. The prospect for Lehman's $4.3
billion in mortgage securities getting liquidated sparked a selloff in the
commercial mortgage-backed securities (CMBS)

Several money funds and institutional cash funds had significant

exposure to Lehman with the institutional cash fund run by The Bank of
New York Mellon and the Primary Reserve Fund, a money-market fund,
both falling below $1 per share, called "breaking the buck", following
losses on their holdings of Lehman assets

Putnam Investments, a unit of Canada's Great-West Life co, shut a

$12.3 billion money-market fund as it faced "significant redemption
pressure" on September 17, 2008.

Lehman Brothers International held close to 40 billion dollars of

clients assets when it filed for Chapter 11 Bankruptcy. Of this, 22 billion
had been re-hypothecated.

After bankruptcy
As of September 2012, Lehman emerged from bankruptcy, and now
looks very much like a normal investment bank. The only difference is
that Lehman’s sole objective is to sell everything it owns so that it can
repay its lenders and disappear.

Actions Taken

ž LBHI filed a petition under Chapter 11 of the US bankruptcy code.

ž Its US broker-dealer subsidiary was acquired by Barclays a few days

later.

Conclusion

ž Lehman's ban
ž Its collapse also served as the catalyst for the purchase of Merrill
Lynch by Bank of America in an emergency deal that was also
announced on September 15.
kruptcy led to more than $46 billion of its market value being wiped out.