Document Type
Case Study
Case Series
The Lehman Brothers Bankruptcy
JEL Codes
G01, G28
Abstract
The Lehman Brothers court-appointed bankruptcy examiner produced a 2,200-page report detailing possible claims that the estate might pursue. The most surprising revelation of the report was that during its last year Lehman had relied heavily on an unusual financing transaction—Repo 105. The examiner concluded that Lehman’s aggressive use of Repo 105 transactions enabled it to remove up to $50 billion of assets from its balance sheet at quarter-end and to manipulate its leverage ratio so that it could report more favorable results. This case considers in-depth Lehman’s questionable use of Repo 105 transactions and its impact.
Recommended Citation
Wiggins, Rosalind Z. and Metrick, Andrew
(2019)
"The Lehman Brothers Bankruptcy C: Managing the Balance Sheet Through the Use of Repo 105,"
Journal of Financial Crises: Vol. 1
:
Iss. 1, 80-99.
Available at:
https://elischolar.library.yale.edu/journal-of-financial-crises/vol1/iss1/4
Date Revised
2019-03-20
Included in
Banking and Finance Law Commons, Corporate Finance Commons, Economic History Commons, Economic Policy Commons, Law and Politics Commons, Policy Design, Analysis, and Evaluation Commons