What happens when a Bank goes Bankrupt?

August 14, 2011 Betsy Lynch 0 Comments

It’s so ironic that the once-upon-a-time 4th largest investment bank in the country, Lehman Brothers Holdings Inc., filed for Chapter 11 bankruptcy on September 15, 2008 with $639 billion in assets.  They’ve proposed to pay an average of $0.20 on the dollar to service their debts by proposing to pay about $65 billion to the creditors who’ve claim roughly $320 billion.  The Lehman Brothers bankruptcy is undoubtedly the largest bankruptcy in U.S. History.

A court hearing is set for August 30th for the New York Bankruptcy Judge handling the case to rule on currently pending pleadings.  If approved, the current plan could be sent to a creditors vote by November 4th, with repayment to begin shortly thereafter, pending creditor approval.  This bankruptcy filing was viewed as one of the key factors contributing to the financial crisis in the Fall of 2008 as it was six times larger than any bankruptcy filing in history.

For more information on the Lehman Brothers bankruptcy, please see In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555 and more information for the general public at http://en.wikipedia.org/wiki/Bankruptcy_of_Lehman_Brothers and http://www.reuters.com/article/2011/08/11/lehman-idUSN1E77A1NE20110811.  

For more information on bankruptcy, please visithttp://www.abankruptcyfirm.com/ or contact your Kansas City Bankruptcy Lawyer, Betsy Lynch at 816.434.6616.

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