Lehman Brothers

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Lehman Brothers Holdings Inc.

logo
legal form Incorporated
ISIN US5249081002
founding 1850
resolution 2008
Reason for dissolution insolvency
Seat New York City , New York , United States
United StatesUnited States 
management Bryan Marsal (Bankruptcy Administrator)
Richard S. Fuld, Jr. ( CEO , 1994-2008)
Number of employees 28,556 (November 30, 2007)
sales 19,257,000,000 US dollars (2007)
Branch banks and insurance companies
Website www.lehman.com

Bank building in Times Square , New York City

Lehman Brothers (often [ ˈliːmən ]; commercially Lehman Brothers Holdings Inc. ) was a US investment bank headquartered in New York that had to file for bankruptcy on September 15, 2008 as a result of the financial crisis . In 2007 the bank had 28,600 employees worldwide.

history

Lehman Brothers was founded in Montgomery , Alabama in 1850 by the brothers Hayum (Henry), Mendel (Emmanuel) and Maier (Mayer) Lehmann. The brothers - sons of the Jewish-Lower Franconian cattle dealer Abraham Löw Lehmann - had emigrated to the USA from Rimpar near Würzburg between 1844 and 1850 . Before founding Lehman Brothers, Henry Lehmann opened a general store in Alabama in 1844. His brother Emmanuel joined the business in 1848. The business was soon shifted to trading in cotton , with the brothers profiting from the Atlantic slave trade . From this the banking activity developed.

After the American Civil War , business was relocated to New York .

1977 merged with Lehman Brothers Kuhn, Loeb & Co. and changed its name briefly as Lehman Brothers Kuhn Loeb & Co. In 1984, Lehman Brothers from American Express bought with Shearson and 1988 with EF Hutton & Co. merged. In 1993 American Express sold the resulting company to the Travelers Group . The Travelers Group parted with investment banking, which in 1994 became an independent company again under the name Lehman Brothers and went public. In the last few years up to the bankruptcy, the now independent company was able to consolidate its market position in the competition.

In May 2007, Lehman Brothers, together with real estate investor Tishman Speyer Properties , bought Archstone-Smith (founded in Englewood , Colorado in 1963 ), the second largest listed home owner in the United States . The purchase price for the group was $ 22 billion.

insolvency

Due to the US real estate crisis and the subprime market crisis , the bank initially had to write off 3.3 billion US dollars. In April 2008, the institute carried out a capital increase of 4 billion US dollars, followed by another 5 billion US dollars in June 2008.

The troubled US bank announced on September 10, 2008 that it expected losses of $ 3.9 billion for the third quarter of 2008. Richard S. Fuld, Jr. , then chief executive officer of Lehman Brothers, announced the sale of a majority stake in the investment division, the spin-off of commercial real estate and other illiquid assets. As a further measure, the dividend should be reduced to $ 0.05 per share. The sales efforts were, however, failed a few days later and the bank had on September 15 , the 2008 bankruptcy under Chapter 11 of the US Bankruptcy Code apply.
After the Bush administration bailed out three large banks ( Bear Stearns , Fannie Mae and Freddie Mac ) with billions of dollars, political pressure not to absorb more banks had grown so great that then-US Treasury Secretary Henry Paulson ( Goldman, opponent of Lehman's CEO Richard Fuld) , did not provide any more billions after the British Barclays Bank's refusal to acquire a stake in Lehman, which - contrary to the previous principle of too big to fail - led to the insolvency of Lehman Brothers. A few days after the collapse, only 170 employees were working for Lehman Brothers, 24,988 had been terminated under the insolvency administrator Bryan Marsal in a few days. The damage caused by this sudden bankruptcy is estimated at between $ 50 billion and $ 75 billion.

On September 17, 2008, the British universal bank Barclays announced that it would take over large parts of the US business of Lehman Brothers, including the entire infrastructure with 9,000 employees and the headquarters in New York, out of the bankruptcy estate. Japan's largest brokerage house, Nomura Holdings , bought Lehman Brothers' Asian operations and investment banking operations in Europe and the Middle East on September 22nd.

As a result of the bankruptcy, Lehman Brothers is said to have left a mountain of debt of over 200 billion US dollars.

After the bankruptcy, the following Lehman Brothers divisions arise:

  • Lehman Brothers North America → Barclays Capital
  • Lehman Brothers Hong Kong → KPMG China
as liquidator for eight subsidiaries (including LB Asia Holdings Limited, LB Asia Limited)

Global impact

Extent of the global financial crisis (annual development 2007 → 2008)
  • Countries with official recession (two stagnant quarters)
  • Countries with unofficial recession (one quarter)
  • Countries with an economic downturn of more than 1.0%
  • Countries with an economic downturn of more than 0.5%
  • Countries with an economic downturn of more than 0.1%
  • Countries with positive economic development
  • N / A (not specified)
    • IMF estimate (December 2008)

    The consequences of the bankruptcy of Lehman Brothers Holding were not limited to the USA. The collapse that began in the US and was initially apparently limited to the bursting of a housing bubble grew into a major global financial crisis. In the course of this crisis, banks mistrusted each other in financial transactions, so that far fewer loans were granted worldwide. Up until the present (2015), this has required a large number of measures by individual states and entire communities of states.

    Consequences of bankruptcy in Germany

    Lehman Brothers branch in Frankfurt am Main

    Lehman Brothers was also represented in Germany with a subsidiary in Frankfurt am Main ; a board member since 2005 was Hans Martin Bury . The Federal Financial Supervisory Authority (BaFin) issued on 15 September 2008 to the German Lehman Brothers Bankhaus AG disposals and payment ban . It also prohibited the German subsidiary from accepting payments that were not intended to repay its own debts ( moratorium ). On October 28, 2008, the BaFin determined the compensation case for Lehman Brothers Bankhaus AG in Frankfurt am Main. On November 13 - as required by law in bank insolvencies (cf. Section 46b KWG) - insolvency proceedings were opened against the assets of Lehman Brothers Bankhaus AG at the request of BaFin. The Frankfurt lawyer Michael Frege was appointed as insolvency administrator . After the creditors accepted an insolvency plan, it became known in the meantime that the claims of the creditors of the German subsidiary could be fully serviced. The main creditors of Lehman Brothers Bankhaus AG listed next to the Bundesbank, the Deposit Protection Fund of the Association of German Banks and the recovery of loans specialized hedge funds .

    The bankruptcy of the American parent company also damaged German investors who had acquired certificates from the Dutch subsidiary, Lehman Brothers Treasury Co. BV. In addition to registering their claims on the insolvency table in the USA and the Netherlands, numerous German investors took legal action against their credit institutions for incorrect investment advice . The Frankfurt am Main regional court had to deal with a lawsuit against Frankfurter Sparkasse for incorrect investment brokerage in 2008 and 2009. The Hamburger Sparkasse (Haspa) agreed on 18 February 2009 provides about one thousand to pay investors a compensation of 9.5 million euros after Dresdner Bank, Hamburg Regional Court had been sentenced to pay damages. Around 3,700 investors at Haspa had acquired Lehmann certificates worth around 54 million euros. The Hamburg Regional Court sentenced the Hamburger Sparkasse with a judgment of June 23, 2009 - file number 310 O 4/09 - for damages because it had not informed the investor of the lack of deposit insurance and existing conflicts of interest. However, the appeal was dismissed by judgment of the OLG Hamburg on April 23, 2010 - Az. 13 U 118/09. With a further ruling of July 1, 2009, another chamber of the Hamburg Regional Court sentenced the company to repayment due to a lack of clarification about the reimbursement or trading margin. The complaints due to faulty investment brokerage are often based on the following failure to provide information: No deposit insurance under the former Dutch law, misleading information regarding the issuer, lack of information on commissions and failure to provide information on credit risks. In its rulings on September 27, 2011, the Federal Court of Justice dismissed the claims brought by investors in Hamburger Sparkasse with final and absolute effect. The defendant Sparkasse did not breach its duty to advise investors and property in either case. Hamburger Sparkasse did not have to point out the possibility of the US investment bank and its Dutch subsidiary Lehman Brothers Treasury Co. BV becoming insolvent because a specific risk of insolvency was not apparent. The duty to inform about a general issuer risk has also been fulfilled. According to the BGH, there is no obligation to provide additional information that the certificates are not subject to any deposit protection fund. A bank does not have to provide information about its own profit margin either.

    The Hechingen district court sentenced Volksbank Albstadt-Tailfingen to reimburse a customer for a deposit of 100,000 euros because they had not given him any information or advice about a total risk of failure.

    The private bank Delbrück Bethmann Maffei had also sold Lehman certificates until just before the bank went bankrupt. In this context, the Hamburg Regional Court sentenced the bank to compensation for damages in November 2009, February 2010, March 2010, April 2010 and February 2011. The ruling of November 2009 has been legally binding since August 2010 after the bank surprisingly withdrew its appeal two days before the verdict was announced by the Hamburg Higher Regional Court.

    In addition to legal action, numerous investors chose the cheaper way of mediation. In an arbitration ruling by the ombudsman of private banks on May 6, 2009 - file number H 932/08 - Citibank was obliged to reverse investment transactions in connection with Lehman Brothers certificates, the functioning of which not even the bank's clerk seemed to have correctly understood.

    Ig Nobel Prize

    The executives and directors of Lehman Brothers as well as Goldman Sachs , AIG , Bear Stearns , Merrill Lynch and Magnetar Capital received the 2010 Ig Nobel Prize in Economics for creating and promoting new ways to invest money - ways to maximize financial return and Minimizing the financial risk to the world economy or part of it. All of the winners among the 1200 guests attended the award ceremony, with the exception of the managers concerned. The editor-in-chief of the Annals of Improbable Research , Marc Abrahams , stated that even the attempt to issue invitations had hit a wall of silence among the managers: “They never answered, not even with a 'No, thank you'. "

    See also

    Movie

    • Peter Gerhardt: Review: The bankruptcy of the century. How the Lehman crash changed the world . Documentation, hr , 2009, 45 min.
    • Michael Tuft, Paul Amberg: The big crash. The bankruptcy of the Lehman Bank. Documentation, BBC / ZDF , 2009, 45 min.
    • The big crash margin call , by JC Chandor : a feature film from 2011, whichdepictsthe events of the discovery and the subsequent immoral sale of all possible “bad papers” shortly before bankruptcy.
    • Too Big to Fail - The Great Crisis , by Curtis Hanson : the award-winning and star-studded film from 2011 focuses on the financial crisis from 2007 and its key characters and their actions.
    • Inside Lehman Brothers - Whistleblowers Unpack , Franco-Finnish television documentary from 2018 on ARTE (85 min.); Internal whistleblowers report how they warned in vain and were then put under massive pressure and threatened - and that nothing has changed since then.

    Literature and theater

    • Lawrence G. McDonald, Patrick Robinson: A colossal failure of common sense. The inside story of the collapse of Lehman Brothers . Crown Business (Random House), New York 2009, ISBN 978-0-307-58833-3 .
    • Play by Stefano Massini: Lehman Brothers. The rise and fall of a dynasty. First performance 2013.

    Web links

    Commons : Lehman Brothers  - collection of pictures, videos and audio files

    Individual evidence

    1. ↑ a b zonebourse.com (PDF)
    2. ↑ Handelsblatt. , September 11, 2008, p. 24.
    3. ↑ Roland Flade: The Lehmanns and the Rimpar Jews . Königshausen & Neumann , 1996, ISBN 9783826012730 , p. 9.
    4. ^ Lehman Brothers Admits Past Ties to Slavery ( English ) National Public Radio . December 11, 2003. Retrieved February 11, 2019.
    5. ↑ Lehman needs $ 5 billion . ( Memento from June 7, 2008 in the Internet Archive ) In: Financial Times Deutschland . June 6, 2008.
    6. ↑ Fear of Bear Stearns # 2: Lehman Loses Nearly 4 Billion . ( Memento from September 11, 2008 in the Internet Archive ) Financial Times Deutschland , September 10, 2008.
    7. ↑ Lehman Brothers must file for bankruptcy . In: Handelsblatt . September 15, 2008.
    8. ↑ Application for insolvency of the US investment bank Lehman Brothers including a list of its 30 largest creditors ( Memento from September 22, 2010 in the Internet Archive ) (PDF)
    9. ↑ a b c Klaus Brinkbäumer , Hauke ​​Goos, Frank Hornig, Udo Ludwig , Christoph Pauly: Title Gorillas Spiel . In: Der Spiegel . No. 11 , 2009, p. 40-52 ( online ).
    10. ↑ Nomura is said to be from Lehman Brothers asi. Buy business . Finanznachrichten.de, September 22, 2008.
    11. ↑ Lehman Brothers and the atomic bomb . ( Memento from April 17, 2009 in the Internet Archive ) Financial Times Deutschland , April 14, 2009.
    12. ↑ KPMG China. Retrieved November 3, 2017 .
    13. ^ BaFin moratorium on Lehman Brothers Bankhaus AG. ( Memento from April 27, 2010 in the Internet Archive )
    14. ↑ BaFin determines compensation case for Lehman Brothers Bankhaus AG
    15. ^ AG Frankfurt am Main, decision of November 13, 2008 - 810 IN 1120/08 - Lehman Brothers Bankhaus AG
    16. ↑ Corinna Budras: 10 years after the bankruptcy: What remains of Lehman Brothers . ISSN  0174-4909 ( faz.net [accessed June 11, 2019]).
    17. ↑ On the legal requirements for investment advice, cf. Podewils, Reisich, NJW 2009, 116–121: Liability for “scrap certificates”? - Obligations to provide information and advice in accordance with the German Civil Code and WpHG when purchasing certificates
    18. ↑ In a judgment of November 28, 2008 it dismissed the investor couple's action (LG Frankfurt am Main, judgment of November 28, 2008 - 2 19 O 62/08 - not final)
    19. ↑ With a further judgment of April 7, 2009, however, the lawsuit against the bank for incorrect investment advice instead of LG Frankfurt am Main, judgment of April 7, 2009 - 2 19 O 211/08 - was not legally binding
    20. ↑ With a judgment of December 15, 2008, the Hamburg Regional Court upheld investors' action (LG Hamburg, judgment of December 15, 2008 - 318 O 4/08 - not final)
    21. ↑ Hamburg: Sparkasse pays millions to Lehman victims. In: Spiegel Online . February 18, 2009, accessed February 13, 2015 .
    22. ↑ LG_Hamburg_Urt_v_23062009_310_O_4_09
    23. ↑ On the liability of the advisory bank when selling certificates from "Lehman Bros. Inc."; Duty to provide information about profit margins and non-intervention by a deposit guarantee system. In: Rechtssprechung.hamburg.de. June 23, 2009, accessed February 13, 2015 .
    24. ↑ openjur.de LG Hamburg · Judgment of July 1, 2009 · 325 O 22/09
    25. ↑ Az. XI ZR 178/10, XI ZR 182/10.
    26. ↑ Bank has to pay for Lehman damage. SWR. Last changed on November 15, 2009.
    27. ↑ Delbrück sentenced to damages. In: Abendblatt.de . December 1, 2009, accessed February 13, 2015 .
    28. ↑ Hamburg Regional Court judgment 309 O 177/09 of November 26 , 2009 ( Memento of December 4, 2009 in the Internet Archive ) In: sblq.de
    29. ↑ Delbrück has to compensate Lehman victims. In: Abendblatt.de . February 12, 2010, accessed February 13, 2015 .
    30. ↑ 2010-03-17 LG Hamburg: On the disclosure obligations of a bank (Delbrück) when selling Lehman certificates. ( Memento from March 22, 2010 in the Internet Archive ) In: diekmann-rechtsanwaelte.de
    31. ↑ Taylor Wessing advises Friedman Corporation on the acquisition of Albat + Wirsam Software GmbH. (No longer available online.) In: rws-verlag.de. February 7, 2013, archived from the original on March 3, 2015 ; accessed on February 13, 2015 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.rws-verlag.de
    32. ↑ 2011-02-02 LG Hamburg: Lehman victim wins claim for damages against the private bank Delbrück ( Memento from February 4, 2011 in the Internet Archive ) In: diekmann-rechtsanwaelte.de
    33. ^ Lehman certificates: Bankhaus Delbrück withdraws its appeal to the Hamburg Higher Regional Court two days before the judgment is announced. (No longer available online.) In: pressinfocom.com. August 10, 2010, archived from the original on January 19, 2015 ; accessed on February 13, 2015 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.pressinfocom.com
    34. ↑ Steffen Preißler: Money back for Lehman victims - new hope for victims. In: Abendblatt.de . August 11, 2010, accessed February 13, 2015 .
    35. ↑ Ig Nobel Prizes 2010: Animal oral sex ensures researcher fame. In: Der Spiegel . October 1, 2010, accessed June 21, 2016 .
    36. ↑ The American Nightmare: "Inside Lehman Brothers" on documentary film.info
    37. ^ Lehman Brothers. The rise and fall of a dynasty. In: Per H. Hauke ​​Verlag. Retrieved May 6, 2018 .