Abstract
The research background is Lehman Brothers Holdings Inc. (Lehman Bro.) sending Chapter 11 bankruptcy protection application due to extremely high leverage and liquidity lacking towards New York Court in the Subprime Lending Crisis, 2008. This research illustrates the events economic background, three critical factors to final bankruptcy and practical solutions from Macro and Micro perspectives. This research adopts the typical case analysis method and concludes that mismatching capital structure with high insolvency risk, not be acquired or purchased for its qualified and inferior assets by other financial institutions or provided timely adequate capital support by American Federal Reserves, agency problem as conflicts of interests between the chief executive officer and his employment's shareholders in risk preference, and finally inappropriate accounting policies without complete disclosure of misconducting Repo105 to reduce debt-equity ratio for external investors are essential reasons account for Lehman Bro. Bankruptcy in 2008 with concrete illustrations in this case analysis research papers.
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