Lehman Brothers

The Lehman Brothers Inc. (often [li ː mən ] ) was an American investment bank headquartered in New York, which had to apply for bankruptcy as a result of the financial crisis on 15 September 2008. In 2007, the Bank employed 28,600 people worldwide.

History

Lehman Brothers in 1850 in Montgomery, Alabama, by the brothers Hayum (Henry), Mendel ( Emmanuel ) and Maier ( Mayer) Lehman founded. The brothers - sons of the Frankish cattle dealer Abraham Löw Lehmann - were 1844-1850 emigrated from Rimpar near Würzburg in the United States. Prior to the establishment of Lehman Brothers opened Henry Lehman, 1844, in Alabama a general store. His brother Emanuel joined the business in 1848 in a. The business was soon shifted to the cotton trade. From this, the banking activity developed.

After the American Civil War the 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 was bought Lehman Brothers American Express and Shearson and with 1988 EF Hutton & Co. merged. 1993 American Express sold the resulting company to the Travelers Group. The Travelers Group separated from investment banking, in 1994 under the name of Lehman Brothers again became an independent company and went public. In recent years, up to the insolvency now independent company was able to consolidate its market position in the competition.

In May 2007, Lehman Brothers bought together with the real estate investor Tishman Speyer Properties is the second largest publicly traded apartment owner in the U.S., Archstone - Smith. The purchase price for the Group amounted to 22 billion U.S. dollars.

Insolvency

In the wake of the financial crisis that began in 2007, the Bank had initially write off 3.3 billion U.S. dollars. In April 2008, the Institute had carried out a capital of 4 billion U.S. dollars, another in the amount of 5 billion U.S. dollars, followed in June 2008.

The ailing U.S. bank had had announced on 10 September 2008 that it expects losses of 3.9 billion dollars for the third quarter of 2008. Richard Fuld, former CEO of Lehman Brothers, announced the sale of a majority stake in the investment management business, the outsourcing of commercial real estate and other illiquid assets. As a further measure also the dividend to $ 0.05 per share should be reduced. The sales efforts were, however, failed a few days later and it had on 15 September 2008 for the Lehman Brothers bankruptcy under Chapter 11 of the U.S. Bankruptcy Code may be requested. After the U.S. government had three major banks ( Bear Stearns, Fannie Mae and Freddie Mac) supported with billions of dollars, the political pressure to not catch more banks become so great that the then U.S. Treasury Secretary Henry Paulson ( opponent was the Lehman CEO Richard Fuld ) ready made ​​after the cancellation of Barclays Bank, to participate in Lehman, no more support, which - led to the bankruptcy of Lehman Brothers - contrary to the previous principle too big to fail. A few days after the bankruptcy only 170 employees worked for Lehman Brothers, 24,988 were terminated by the liquidator Bryan Marsal in a few days. The damage caused by this sudden insolvency is estimated at 50 to 75 billion U.S. dollars.

On 17 September 2008, the British bank Barclays Universal announced that they would take over large parts of the U.S. business of Lehman Brothers, including the entire infrastructure with 9,000 employees and is headquartered in New York, from the liquidator out. Japan's largest brokerage house, Nomura Holdings, purchased on September 22, the Asian business as well as the investment banking division of Lehman Brothers in Europe and the Middle East.

As a result of the insolvency of Lehman Brothers should have left a debt of over 200 billion U.S. dollars.

Following the insolvency of Lehman Brothers following divisions arise:

• Lehman Brothers North America → Barclays Capital
• Lehman Brothers Hong Kong → KPMG China

• Lehman Brothers Asia Pacific → Nomura
• Lehman Brothers International Europe → Management by PricewaterhouseCoopers
• Lehman Brothers Holdings Inc. → for Chapter 11 bankruptcy
• Neuberger Berman → independent investment company

Global impacts

• Countries with an 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 available )
• Assessment of the IMF (December 2008)

The consequences of the insolvency of the " Lehman Brothers " ultimately did not remain limited to the United States. The collapse that began in the U.S. and initially seemingly to the bursting ( "Crash " ) of a " housing bubble " was limited ( " the financial crisis starting in 2007 " ), blossomed into the great global financial crisis: it was expressed, inter alia, that the banks " are not mutually more about the way dared " so that almost no loans were granted to the world. This made globally a variety of measures of the individual states and entire communities of states required, up to the present (2012 ) continue to be effective.

Consequences of insolvency in Germany

Lehman Brothers was also represented in Germany with a subsidiary in Frankfurt am Main; was a board member since 2005, Hans Martin Bury. The Federal Financial Supervisory Authority ( BaFin) issued on September 15, 2008 compared to the German Lehman Brothers Bankhaus AG, a sale and payment ban. They also forbade the German subsidiary to accept payments, which were not meant for the eradication of own debt ( moratorium ). On 28 October 2008, the BaFin stated the case of compensation for Lehman Brothers Bankhaus AG in Frankfurt. On 13 November, the insolvency proceedings over the assets of Lehman Brothers Bankhaus AG was opened. Applications for such BaFin had asked. As the meantime it became known creditors of the German subsidiary can use a virtually complete satisfaction expect their claims, ie, with a failure rate of approximately 100%. The main creditors of Lehman Brothers Bankhaus AG is next to the Federal Bank, the Deposit Protection Fund of the Association of German Banks, specializing in the recovery of credit hedge funds.

The insolvency of the U.S. parent company also damaged German investors, had acquired the certificates of the Dutch subsidiary, Lehman Brothers Treasury Co. BV. In addition to the lodgement of their claims with the insolvency administrator in the U.S. and the Netherlands initiated a number of German investors legal action against their banks due to faulty investment advice. With a lawsuit against the Frankfurter Sparkasse 1822 due to faulty investment brokerage in 2008 and 2009, the Landgericht Frankfurt am Main had to deal. Hamburger Sparkasse (Haspa ) agreed on 18 February 2009 ready approximately one thousand investors to pay compensation of 9.5 million euros after the Dresdner Bank had been sentenced by the District Court of Hamburg for damages. When Haspa about 3,700 investors Lehmann certificates acquired in the values ​​of about 54 million euros. The Hamburg Regional Court sentenced the Hamburger Sparkasse, by judgment of 23 June 2009 - reference number 310 O 4/ 09 - to pay damages because she had not pointed the investor to the lack of deposit insurance and existing conflicts of interest. However, the action is on appeal by judgment of the Higher Regional Court of Hamburg on 23 April 2010 - Case No. 13 U 118/ 09 - was dismissed. By judgment of 1 July 2009, sentenced to another chamber of the Landgericht Hamburg due to lack of awareness on the reimbursement or trading range for redemption. Supported the complaints of faulty investment mediation often omitted in the following information: No deposit insurance after the former Dutch law, misleading information regarding the Issuer, lack of education about commissions and omitted references to credit risks. By judgments of 27 September 2011 the Federal Court of the complaints of the investors of Hamburger Sparkasse finally dismissed. The defendant Savings Bank have their duty to investors and object -oriented advice is not violated in both cases. On the insolvency possibility of U.S. investment bank and its Dutch subsidiary Lehman Brothers Treasury Co. BV have the Hamburger Sparkasse not need to point because a concrete risk of bankruptcy was not recognizable. The duty to provide information on a general issuer risk had been met. A requirement for additional clarification about the fact that the certificates were covered by any deposit insurance fund, according to Supreme Court does not consist. Even its own profit margin would not clear up a bank.

The district court sentenced Hechingen Volksbank Albstadt -Tailfingen to reimburse a customer the deposit of 100,000 Euros, because it had given him no information and on a total failure risk.

Also, the private bank Delbrück Bethmann Maffei had Lehman certificates until sold immediately before the bankruptcy of the bank. In this context, the Hamburg Regional Court sentenced in November 2009, February 2010, March 2010, April 2010 and February 2011, the Bank for damages. The judgment in November 2009, is legally since August 2010, after the bank two days before his appeal of the verdict by the OLG Hamburg withdrew surprising.

In addition to litigation many investors chose the cheaper route via arbitration. In an arbitration award of the Ombudsman of the private banks of 6 May 2009 - reference number H 932/ 08 - Citibank was obligated voiding of investment business in connection with Lehman Brothers certificates, seemed to have not even covered the operator of the bank correct their functioning.