"Bankruptcy of Lehman Brothers The filing for Chapter 11 bankruptcy protection by financial services firm Lehman Brothers on September 15, 2008, remains the largest bankruptcy filing in U.S. history, with Lehman holding over in assets. The bank had become so deeply involved in mortgage origination that it had effectively become a real estate hedge fund disguised as an investment bank. At the height of the subprime mortgage crisis, it was exceptionally vulnerable to any downturn in real estate values. The bankruptcy triggered a one-day drop in the Dow Jones Industrial Average of 4.5%, the largest decline since the September 11,"
"to the market opening on 17 November 2008. The company filed for Chapter 11 in the U.S. Bankruptcy Court in the Southern District of New York on 18 February 2009, with $2.23 billion in total debt and $1.76 billion in total assets as of 30 September. The filing included only the company's U.S. operations. Unable to sustain the heavy debt load resulting from ill-advised expansion moves, costly management errors and audit fees associated with the bankruptcy process, the company negotiated debt for equity swaps with its creditors and zeroed the value of its common shares, wiping out existing investors. By"
"for the risk of the loan to AIG. The Seattle-based bank holding company Washington Mutual declared bankruptcy on September 26, 2008. The 120-year-old company, one of the largest banking institutions in the US West, was driven into bankruptcy by the subprime crises. On the previous day, September 25, 2008, the United States Office of Thrift Supervision (OTS) announced that it closed the holding company's primary operating subsidiary, Washington Mutual Savings Bank, and had placed it into the receivership of the Federal Deposit Insurance Corporation (FDIC). The FDIC sold the assets, all deposit accounts, and secured liabilities to JPMorgan Chase, but"
"in American financial history, dwarfing the failure of Continental Illinois in 1984. On September 26, 2008, Washington Mutual, Inc., and its remaining subsidiary, WMI Investment Corp., filed for Chapter 11 bankruptcy. Washington Mutual, Inc., was promptly delisted from trading on the New York Stock Exchange, and commenced trading via Pink Sheets. The bankruptcy was the second major filing in as many weeks, after the Lehman Brothers filing eleven days earlier; both bankruptcies far outpaced WorldCom's 2002 filing, which had held the record with just under $104 billion in assets (Washington Mutual's alone, which was approximately half that of Lehman Brothers,"
"a New York City Bankruptcy court filing. The same day, the sale of Merrill Lynch to Bank of America was announced. The beginning of the week was marked by extreme instability in global stock markets, with dramatic drops in market values on Monday, September 15, and Wednesday, September 17. On September 16, the large insurer American International Group (AIG), a significant participant in the credit default swaps markets, suffered a liquidity crisis following the downgrade of its credit rating. The Federal Reserve, at AIG's request, and after AIG had shown that it could not find lenders willing to save it"
"the firm. It collapsed and was sold at a fire-sale price to bank JP Morgan Chase March 16, 2008. American homeowners, consumers, and corporations owed roughly $25 trillion during 2008. American banks retained about $8 trillion of that total directly as traditional mortgage loans. Bondholders and other traditional lenders provided another $7 trillion. The remaining $10 trillion came from the securitization markets, meaning the parallel banking system. The securitization markets started to close down in the spring of 2007 and nearly shut-down in the fall of 2008. More than a third of the private credit markets thus became unavailable as"
"assets under management, Washington Mutual Bank's closure and receivership is the largest bank failure in American financial history. Before the receivership action, it was the sixth-largest bank in the United States. According to Washington Mutual Inc.'s 2007 SEC filing, the holding company held assets valued at $327.9 billion. On March 20, 2009, Washington Mutual Inc. filed suit against the FDIC in the United States District Court for the District of Columbia, seeking damages of approximately $13 billion for what it claims was an unjustified seizure and an extremely low sale price to JPMorgan Chase. JPMorgan Chase promptly filed a counterclaim"
"the Bear Stearns CSE Broker (Bear Stearns & Co. Inc) was adequate and, it appears, would have been adequate under the pre-2004 ""haircuts"" as well. Lehman Brothers Holdings Inc entered bankruptcy on September 15, 2008. Its CSE Broker (Lehman Brothers Inc (""LBI"")) was not included in the bankruptcy filing and continued to operate until its customer accounts and other assets were acquired by Barclays Capital Inc. As a condition to that acquisition the Securities Investor Protection Corporation (""SIPC"") commenced a liquidation of LBI on September 19, 2008, in order to complete the transfer of LBI customer accounts and resolve disputes"
"announced that BB&T would buy Colonial's branches and deposits in a deal with the FDIC. This was the biggest bank failure of 2009. On August 25 Colonial BancGroup filed for Chapter 11 bankruptcy. The bankruptcy case's name is ""In re Colonial BancGroup Inc, U.S. Bankruptcy Court, Middle District of Alabama (Montgomery), No. 09-32303"". The bankruptcy trustee for Taylor, Bean & Whitaker Mortgage Corp., once one of the nation’s biggest privately held mortgage companies, is suing PricewaterhouseCoopers as the auditor of Colonial Bank, seeking $5.5 billion in damages. The trustee alleged in the 2013 suit that PricewaterhouseCoopers was negligent in not"
"is the largest U.S. bank failure in history. Wachovia Corp., the fourth biggest US bank by assets, agreed on September 29, 2008 to divest all of its banking subsidiaries to CitiGroup in an all-stock transaction, scheduled to be consummated by December 31, 2008. The transaction ""open bank"" was facilitated by the FDIC and with the concurrence of the United States Department of the Treasury, and the Board of Governors of the Federal Reserve Bank. The FDIC guaranteed to Citigroup to cover any losses on the Wachovia banking portfolio greater than $42 billion, in exchange for $10 billion in preferred stock."
"30, 2008). The FDIC sold the banking subsidiaries (minus unsecured debt and equity claims) to JPMorgan Chase for $1.9 billion, which JPMorgan Chase had been planning to acquire as part of a confidential plan internally nicknamed Project West. All WaMu branches were rebranded as Chase branches by the end of 2009. The holding company, Washington Mutual, Inc., was left with $33 billion in assets, and $8 billion debt, after being stripped of its banking subsidiary by the FDIC. The next day, Washington Mutual, Inc. filed for Chapter 11 voluntary bankruptcy in Delaware, where it was incorporated. With respect to total"
"Bank of America. It came as a defeat for bondholders and their $868M in claims. The injunction will not apply outside the U.S. or to any Parmalat affiliates or subsidiaries not restructuring under Italian bankruptcy law. June 25 - Bank of America representatives in Milan, Italy release a statement claiming the bank lost $450M from the Parmalat collapse. July 6 - An Italian judge ordered Bank of America, Citigroup, Morgan Stanley, Deutsche Bank, and UBS AG to stand trial in January 2008. The specific charges against Bank of America are in connection with an Italian law through which a company"
"HSBC, Standard Chartered, Banco Santander and Nomura. At one point, Hank Paulson offered Morgan Stanley to JPMorgan Chase at no cost, but Jamie Dimon refused the offer. Morgan Stanley and Goldman Sachs, the last two major investment banks in the US, both announced on September 22, 2008 that they would become traditional bank holding companies regulated by the Federal Reserve. The Federal Reserve's approval of their bid to become banks ended the ascendancy of securities firms, 75 years after Congress separated them from deposit-taking lenders, and capped weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led"
"taken by Treasury Secretary Paulson to ensure the financial soundness of those two companies."" Beginning with bankruptcy of Lehman Brothers at midnight Monday, September 15, 2008, the financial crisis entered an acute phase marked by failures of prominent American and European banks and efforts by the American and European governments to rescue distressed financial institutions, in the United States by passage of the Emergency Economic Stabilization Act of 2008 and in European countries by infusion of capital into major banks. Afterwards, Iceland almost claimed to go bankrupt as the country's three largest banks, and in effect financial system, collapsed. Many"
"became important to the wholesale money market leading up to the crisis. Their purchases of asset-backed securities and large-scale funding of foreign banks' short-term U.S.-denominated debt put the funds in a pivotal position in the marketplace. The week of September 15, 2008, to September 19, 2008, was very turbulent for money funds and a key part of financial markets seizing up. On Monday, September 15, 2008, Lehman Brothers Holdings Inc. filed for bankruptcy. On Tuesday, September 16, 2008, Reserve Primary Fund broke the buck when its shares fell to 97 cents after writing off debt issued by Lehman Brothers. Continuing"
"not unsecured debt or equity obligations. Washington Mutual Savings Bank's closure and receivership is the largest U.S. bank failure in history. Kerry Killinger, the CEO from 1988 to August 2008, had been fired by the board of directors. Virtually all savings and checking account holders were not affected as the accounts were insured by the FDIC during the collapse, and subsequently transferred in whole to JPMorgan Chase. The holding company, Washington Mutual Inc was left without its major asset and equity investment, its former subsidiary Washington Mutual Savings Bank, and filed for bankruptcy the following day, the 26th. WaMu's collapse"
"in government guarantees, after it was unable to continue borrowing to finance its operations. Fourth, during September 2008, the system approached meltdown. In early September Fannie Mae and Freddie Mac, representing $5 trillion in mortgage obligations, were nationalized by the U.S. government as mortgage losses increased. Next, investment bank Lehman Brothers filed for bankruptcy. In addition, two large U.S. banks (Washington Mutual and Wachovia) became insolvent and were sold to stronger banks. The world's largest insurer, AIG, was 80% nationalized by the U.S. government, due to concerns regarding its ability to honor its obligations via a form of financial insurance"
"ducks quack, feed them."" On September 21, 2008, Goldman Sachs and Morgan Stanley, the last two major investment banks in the United States, both confirmed that they would become traditional bank holding companies. The Federal Reserve's approval of their bid to become banks ended the business model of an independent securities firm, 75 years after Congress separated them from deposit-taking lenders, and capped weeks of chaos that sent Lehman Brothers into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp. On September 23, 2008, Berkshire Hathaway agreed to purchase $5 billion in"
"the crisis from 2007-2008 includes: The year 2008, as of September 17, had seen 81 public corporations file for bankruptcy in the United States, already higher than the 78 for all of 2007. The largest corporate bankruptcy in U.S. history also made 2008 a record year in terms of assets, with Lehman's size—$691 billion in assets—alone surpassing all past annual totals. The year also saw the ninth biggest bankruptcy, with the failure of IndyMac Bank. ""The Wall Street Journal"" stated that venture capital funding slowed down, which in the past had led to unemployment and slowed new job creation. The"
"Global financial crisis in September 2008 The subprime mortgage crisis reached a critical stage during the first week of September 2008, characterized by severely contracted liquidity in the global credit markets and insolvency threats to investment banks and other institutions. The United States director of the Federal Housing Finance Agency (FHFA), James B. Lockhart III, on September 7, 2008 announced his decision to place two United States government-sponsored enterprises (GSEs), Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), into conservatorship run by FHFA. United States Treasury Secretary Henry Paulson, at the same press conference"
"Australian Securities Exchange (ASX) suspended Lehman's Australian subsidiary as a market participant after clearing-houses terminated contracts with the firm. Lehman shares tumbled over 90% on September 15, 2008. The Dow Jones closed down just over 500 points on September 15, 2008, which was at the time the largest drop in a single day since the days following the attacks on September 11, 2001. In the United Kingdom, the investment bank went into administration with PricewaterhouseCoopers appointed as administrators. In Japan, the Japanese branch, Lehman Brothers Japan Inc., and its holding company filed for civil reorganization on September 16, 2008, in"
"its investment in the company by $3.4 billion. Andrew Cuomo, New York Attorney General, threatened to sue Merrill Lynch in August 2008 over its misrepresentation of the risk on mortgage-backed securities. A week earlier, Merrill Lynch had offered to buy back $12 billion in auction-rate debt and said it was surprised by the lawsuit. Three days later, the company froze hiring and revealed that it had charged almost $30 billion in losses to their subsidiary in the United Kingdom, exempting them from taxes in that country. On August 22, 2008, CEO John Thain announced an agreement with the Massachusetts Secretary"
"largest bank failure in United States history, and the second largest failure of a regulated thrift. IndyMac Bank's parent corporation was IndyMac Bancorp until the FDIC seized IndyMac Bank. The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), two large government-sponsored enterprises, are the two largest single mortgage backing entities in the United States. Between the two corporations, they back nearly half of the $12 trillion mortgages outstanding as of 2008. During the mortgage crises, some in the investment community feared the corporations would run out of capital. Both corporations insisted that they"
"Operations, respectively. In early 2008, the New York Stock Exchange announced it was planning to suspend trading of JRC's common stock. The stock had been below $1.05 for 30 consecutive days, at one point falling to 16 cents, which was the all-time low at that time. The stock was delisted as of April 16. On February 21, 2009, the company filed for Chapter 11 bankruptcy in the US Bankruptcy Court, located in Manhattan, New York, NY. On August 12, 2009, JRC emerged from bankruptcy as a private company. On September 5, 2012, Digital First Media, parent company of JRC, confirmed"
"of the US investment bank Lehman Brothers Holdings Inc., which listed $639 billion in assets as of its Chapter 11 filing in 2008. The 16 largest corporate bankruptcies as of 13 December 2011: Enron, Lehman Brothers, MF Global and Refco have all ceased operations while others were acquired by other buyers or emerged as a new company with a similar name. The Enron assets were taken from the 10-Q filed on November 11, 2001. The company announced that the annual financials were under review at the time of filing for Chapter 11. Chapter 11, Title 11, United States Code Chapter"
"the fourth largest bank failure in United States history. Prior to IndyMac's failure on July 11, 2008, the bank had come to rely heavily on higher cost, less stable, brokered deposits, as well as secured borrowings, to fund its operations. The bank had focused on stated income and other aggressively underwritten loans in areas with rapidly escalating home prices, particularly in California and Florida. On June 26, 2008, Senator Charles E. Schumer publicly released letters he had previously sent to Reich's agency and others, suggesting that IndyMac bank was in danger of failing and that the danger was being ignored."
"of recession. Global financial crisis in September 2008 The subprime mortgage crisis reached a critical stage during the first week of September 2008, characterized by severely contracted liquidity in the global credit markets and insolvency threats to investment banks and other institutions. The United States director of the Federal Housing Finance Agency (FHFA), James B. Lockhart III, on September 7, 2008 announced his decision to place two United States government-sponsored enterprises (GSEs), Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), into conservatorship run by FHFA. United States Treasury Secretary Henry Paulson, at the same"
"Brothers, however a lack of government guarantees caused the bank to abandon talks with Lehman. Lehman Brothers filed for bankruptcy the same day Bank of America announced its plans to acquire Merrill Lynch. This acquisition made Bank of America the largest financial services company in the world. Temasek Holdings, the largest shareholder of Merrill Lynch & Co., Inc., briefly became one of the largest shareholders of Bank of America, with a 3% stake. However, taking a loss Reuters estimated at $3 billion, the Singapore sovereign wealth fund sold its whole stake in Bank of America in the first quarter of"
"and regulators in relation to its accounting practices and its recognition of losses. On August 14, 2009, the bank failed and its 346 branches were seized by regulators. $22 billion of the bank's deposits were subsequently sold by the FDIC to BB&T Corp. The bank's failure was the largest bank failure in 2009 and the 6th largest bank ever to fail in the United States, costing the FDIC's Deposit Insurance Fund an estimated $2.8 billion. It was also the 74th bank failure of 2009. The bankruptcy trustee for Taylor, Bean & Whitaker Mortgage Corp., once one of the nation’s biggest"
"investment banks. During 2008, three of the largest U.S. investment banks either went bankrupt (Lehman Brothers) or were sold at fire sale prices to other banks (Bear Stearns and Merrill Lynch). These failures augmented the instability in the global financial system. The remaining two investment banks, Morgan Stanley and Goldman Sachs, opted to become commercial banks, thereby subjecting themselves to more stringent regulation. In the years leading up to the crisis, the top four U.S. depository banks moved an estimated $5.2 trillion in assets and liabilities off-balance sheet into special purpose vehicles or other entities in the shadow banking system."
"JPMorgan Chase, to take over most Bear Stearn's assets. Out of concern that Fannie Mae and Freddie Mac might also fail, the Bush administration put both institutions into conservatorship. Shortly afterwords, the administration learned that Lehman Brothers was on the verge of bankruptcy. The administration's intervention in other financial institutions (often described as ""bailouts"") was criticized on both the left and the right. Both Bush and Paulson were reluctant to intervene on behalf of Lehman Brothers. The firm declared bankruptcy on September 15. Paulson hoped that the financial industry had shored itself up after the failure of Bear Stearns and"
"for chapter 11 bankruptcy on December 8, 2008 and auctioned the individual stations on April 16, 2009. Many stations were sold to broadcast companies such as Daystar Television Network. In the company's annual report for 2007, released on April 2, 2008, Equity said that the company was in default on its credit lines, and that if it could not find additional financing it ""will need to cease all or a portion of its operations, seek protection under U.S. bankruptcy laws and regulations, engage in a restructuring or undertake a combination of these and other actions."" An earlier indication of Equity's"
"so many cents of capital for every dollar of credit extended to consumers and businesses. Thus the massive reduction in bank capital just described has reduced the credit available to businesses and households. The crisis hit a critical point in September 2008 with the failure, buyout or bailout of the largest entities in the U.S. shadow banking system. Investment bank Lehman Brothers failed, while Merrill Lynch was purchased by Bank of America. Investment banks Goldman Sachs and Morgan Stanley obtained depository bank holding charters, which gave them access to emergency lines of credit from the Federal Reserve. Government-sponsored enterprises Fannie"