The 158-year-old New York institution issued a statement early Monday
morning after the collapse of a U.S. government-led efforts to save the
bank. Bank of America Corp. and Barclays plc pulled their respective
bid proposals after failing to secure guarantees against Lehman's
future losses. Bank of America went on to agree to buy Merrill Lynch
& Co. for $50 billion, a deal apparently seen by Fed officials as
softening the blow for investors of Lehman's collapse.
Various
press outlets said Lehman Brothers listed more than $613 billion of
debt, which means it is a larger bankruptcy than the failure of
WorldCom Inc. in 2002 and Drexel Burnham Lambert in 1990. Lehman's
statement said none of its subsidiaries, including its broker-dealers,
would participate in the filing, and that its broker-dealers would be
open for business Monday as usual.
The big question is what
such a massive bankruptcy -- especially one in the financial sector, in
which virtually all institutions are counterparties to others -- will
have on the global economy. Concern persists about Washington Mutual
Corp. and insurer American International Group Inc., whose stock has
been pummeled in the market.
- Vipal Monga and Laura BoardSee full story on TheDeal.comSee press release
