Lehman Brothers
What was the Lehman Brothers? Why did it fall? This essay will explore what the Lehman Brothers was and why the business fell into ruin.
The Lehman brothers, Henry, Emanuel and Mayer, formed the Lehman Brothers as mainly a trading operation, that later became a brokerage. What started out as trading in cotton in 1850 soon became a business of stock exchange and a bank. The business, while under the Lehman brothers’, was fairly successful and became the fourth largest bank in the United States.
In the 1970s there was no family member left to run the company so it fell into the hands of Pete Peterson. Peterson took over at a difficult time as the economy was suffering but he was able to get the bank to weather the storm. Lehman Brothers merged or bought out smaller, struggling companies in order to gain a bigger boost and this proved very beneficial.
company going through the crisis of 1997 when the Asian financial disaster happened. The attack of 9/11 left the global headquarters of the Lehman Brothers unusable and they were forced to move from Manhattan to New Jersey. When things had quieted down again, the business moved into New York City, which earned them some criticism for not moving back into Manhattan.
Despite the appearance of everything running smoothly, Lehman Brothers was headed for disaster. A report showing the usage of a gimmick to make the finances look better required a full investigation into the company. In 2007 the firm began to close down its outer branches and withdraw resources.
In 2008, the Lehman stock dropped by seventy-three percent. Lehman Brothers sold off around six billion dollars worth of assets in an effort to recover from loss of two billion and many workers were let go. Near the fall season the management of Lehman’s was taken from Fuld, even though he was still the CEO all the power was now in the COO’s hands, Bart McDade.
However, the change in management could not save the business. The Lehman stock continued to plunge drastically and the South Korean firm that had considered buying them out decided to hold off. After suffering a loss of three billion the business began selling off anything of worth. A few competitor companies stepped forward to buy the firm out and Lehman Brothers ceased to exist.