Lehman Brothers files for bankruptcy

By John Hill on September 15, 2008 10:07 AM |

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LEHMAN Brothers has declared itself bankrupt in a tempestuous morning for the European financial market.

The 158-year-old investment bank announced it was filing for Chapter 11 bankruptcy on Monday morning after a last-minute deal to rescue the high-profile institution failed.

Many workers at the company were seen leaving the building this morning carrying boxes.

Barclays and Bank of America were in talks to rescue the troubled firm, but Bank of America instead turned its attentions to a buy-out of Merrill Lynch.

BoA announced a £27.9billion deal with the company this morning.

London's FTSE 100 stock market plunged by 200 points to 5216.3 this morning as Lehman became the highest-profile casualty of the collapse of the sub-prime mortage market so far.

The US government stepped in last week to rescue mortage giants Fannie May and Freddie Mac, while JP Morgan took over troubled rival Bear Stearns in March.

Lehman Brothers employs around 4,000 staff in Europe, many at its headquarters in Bank Street.