The world of finance is no stranger to the concept of bankruptcy. Companies, both large and small, can find themselves in financial distress, leading to the unfortunate event of bankruptcy. But have you ever wondered what the largest company to ever go bankrupt is? In this article, we'll delve into the details of the biggest bankruptcy in history and explore some other notable cases.
Lehman Brothers: The Largest Bankruptcy in History
On September 15, 2008, Lehman Brothers, a global financial services firm, filed for Chapter 11 bankruptcy protection. This event marked the largest bankruptcy filing in U.S. history, with Lehman holding over $600 billion in assets. The bankruptcy was a result of the subprime mortgage crisis, which led to a massive decline in the value of Lehman's assets. The company's heavy position in subprime mortgages made it vulnerable to the crisis, ultimately leading to its downfall.
The bankruptcy of Lehman Brothers had far-reaching consequences. It triggered a 4.5% one-day drop in the Dow Jones Industrial Average, the largest decline since the attacks of September 11, 2001. The event also led to a general financial panic, with money market mutual funds experiencing mass withdrawal demands and the interbank lending market tightening.
Other Notable Bankruptcies
While Lehman Brothers holds the record for the largest bankruptcy, other notable cases include:
- Silicon Valley Bank Financial Group: In 2023, Silicon Valley Bank Financial Group filed for bankruptcy with liabilities of $3.67 billion. This event was significant as it marked the largest bank failure since Washington Mutual in 2008.
- Modern Land Ltd.: A Beijing-based property developer, Modern Land filed for Chapter 15 bankruptcy protection in 2022 with liabilities of $10.65 billion. This was one of the largest bankruptcies in the past year.
- Garuda Indonesia: The Indonesian airline filed for bankruptcy in 2022 with liabilities of $13.38 billion, making it one of the largest bankruptcies globally.
Resources
- "The World's Biggest Bankruptcies 2023" - https://gfmag.com/data/worlds-biggest-bankruptcies/
- "Bankruptcy of Lehman Brothers" - https://en.wikipedia.org/wiki/Bankruptcy_of_Lehman_Brothers
Other Information
- Federal Reserve System - https://www.federalreserve.gov/
- U.S. Bankruptcy Court, Southern District of New York - https://www.nysb.uscourts.gov/