Lehman files for bankruptcy, plans to sell units

By Dan Wilchins

NEW YORK (Reuters) – Lehman Brothers Holdings Inc filed for bankruptcy protection, after trying to finance too many risky assets with too little capital, making it the largest and highest-profile casualty of the global credit crisis.

Based on its assets at the time of filing, Lehman surpassed WorldCom as the largest U.S. bankruptcy ever. Lehman had about $639 billion in assets at the time of filing, while WorldCom had about $107 billion when it filed for bankruptcy protection in 2002.

The Chapter 11 filing did not include Lehman’s broker-dealer operations and other units, such as asset management firm Neuberger Berman. Those businesses will continue to operate, although Lehman is expected to liquidate them. It said it is in advanced talks on selling its investment management division.

Lehman is one of the biggest investment banks to collapse since 1990, when Drexel Burnham Lambert filed for bankruptcy protection amid a collapse in the junk bond market.

TIMELINE: U.S. financial rescues, failures in last century

(Reuters) – The Federal Reserve and Treasury Department once again led marathon weekend talks in an effort to resolve a crisis at a major financial institution, this time Wall Street investment bank Lehman Brothers, crippled by toxic real estate assets and a collapsing share price.

The federal government has a long history of involvement with financial institution rescues. Following is a chronology of key events over the last century.

Lehman and Merrill to pound already bloody job market

NEW YORK (Reuters) – The likely disappearance of investment banks Lehman Brothers and Merrill Lynch presents a double-barreled hit to an already wounded job market, and will likely depress salaries on Wall Street.

With Lehman headed for bankruptcy and Merrill swallowed by Bank of America, two of Wall Street’s four pillars have crumbled overnight.

Headhunters and consultants said the U.S. financial services sector, already suffering from a glut of unemployed talent after shedding more than 100,000 jobs this year, must now brace for up to 50,000 more.