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Lehman BrothersA Crisis of Value$
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Oonagh McDonald

Print publication date: 2015

Print ISBN-13: 9781784993405

Published to Manchester Scholarship Online: May 2016

DOI: 10.7228/manchester/9781784993405.001.0001

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PRINTED FROM MANCHESTER SCHOLARSHIP ONLINE (www.manchester.universitypressscholarship.com). (c) Copyright Manchester University Press, 2019. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MSO for personal use.date: 18 October 2019

The Destruction of Value

The Destruction of Value

Chapter:
(p.113) 6 The Destruction of Value
Source:
Lehman Brothers
Author(s):

Oonagh McDonald

Publisher:
Manchester University Press
DOI:10.7228/manchester/9781784993405.003.0006

After September 2008, many argued that Lehman’s chaotic bankruptcy filing destroyed billions in value. The main destruction of value, it is said, came from the bankruptcy filing of Lehman Holdings, the parent guarantor, which triggered a series of defaults at subsidiaries holding some 900,000 derivative contracts, which were terminated, whereas a few extra weeks would have allowed Lehman to transfer or unwind most of them. Bankruptcy procedures do not cause a ‘crisis of confidence’ but follow it. In Lehman’s case the filing for bankruptcy confirmed anxieties. It can. However, add to the destruction of value because of the new information flows it brings to light, although even that is to the benefit of some, such as hedge funds, by providing investment opportunities.

Keywords:   Lehman Brothers, Global financial crisis, banking, crash, economy, debt, capital, bankruptcy, value, hedge fund

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