Business and Finance

NEW YORK–Lehman Brothers, a 158-year-old investment bank choked by the credit crisis and falling real estate values, filed for Chapter 11 protection yesterday in the biggest bankruptcy filing ever and said it was trying to sell off key units.

Lehman fell under the weight of $60 billion (U.S.) in soured real estate holdings, and the credit market’s dislocation ultimately forced it to seek court protection. The credit crisis has caused global banks to write down more than $300 billion in asset value since last year, and caused the shotgun sales of Merrill Lynch & Co. and Bear Stearns Cos.

Lehman’s filing in the U.S. Bankruptcy Court in the Southern District of New York marks the end of a Wall Street firm that started the U.S. cotton trade before the Civil War and financed the railroads that built a nation.

Chair and chief executive Richard Fuld, who joined Lehman as a college student in 1969 and was the longest serving CEO on Wall Street, now has the dubious task of winding down the company’s $639 billion of assets. It has about 26,000 employees worldwide, joining the swell of unemployed bankers and traders hurt by the credit crisis.

Many Lehman employees seen entering its midtown Manhattan headquarters tucked their chins down to avoid talking to the media and others lined up behind metal barriers in front of the building.

Lehman’s filing is the biggest corporate bankruptcy in history in terms of assets held, said Mike Bickford of Jupiter eSources direct payday loan cash advance. The next biggest was Worldcom Inc., with $126 billion in assets, and Enron Corp., with $81 billion.

In Washington, the Securities and Exchange Commission said its examiners will remain at the offices of Lehman Brothers to oversee an "orderly transfer" of assets in retail customer accounts to one or more brokerage firms insured by the Securities Investor Protection Corp.

The SEC also said it is co-ordinating with overseas regulators to protect Lehman’s customers and to maintain orderly markets.

Lehman’s last hope of surviving outside of court protection faded on Sunday after British bank Barclays PLC withdrew its bid to buy the troubled investment bank, which learned at a last-minute meeting with federal officials on Friday that it wouldn’t be getting any emergency funding to give it the liquidity it needed, CFO Ian Lowitt said in an affidavit.

Lehman listed Citigroup among its biggest unsecured creditors, with $138 billion in bonds.

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