Lehman Files for Bankruptcy

Lehman Brothers Holdings Inc., the fourth-largest U.S.A. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.

The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, has filed a Chapter 11 petition with U.S.A. Bankruptcy Court in Manhattan.

The collapse of Lehman, which listed more than $613 billion of debt, surpasses WorldCom Inc.'s insolvency in 2002 and Drexel Burnham Lambert's failure in 1990.

Lehman was forced into bankruptcy after two suitors, Barclays Plc and Bank of America Corp., abandoned takeover talks and the company lost 94 percent of its market value this year.

Chief Executive Officer Richard Fuld, who started working for the New York-based firm in 1969 and turned it into the biggest underwriter of mortgage-backed securities at the top of the U.S.A. real estate market, joins his counterparts at Bear Stearns Cos., Merrill Lynch & Co. and more than 10 banks that couldn't survive this year's credit crunch.

The filing is by Lehman's holding company and won't include any of its subsidiaries. Lehman's largest unsecured creditors are Citibank N.A. and The Bank of New York Mellon Corp. as trustees for bondholders owed $138 billion. The bank listed $639 billion of assets.