What companies went bankrupt in 2008? The year 2008 was marked by the worst financial crisis since the Great Depression, leading to the collapse of several major corporations. This article explores some of the notable companies that succumbed to the economic turmoil during that period.
The financial crisis of 2008 had a profound impact on the global economy, causing a ripple effect that led to the bankruptcy of numerous companies. Here are some of the most significant ones:
1. Lehman Brothers
Lehman Brothers, one of the four largest investment banks in the United States, filed for bankruptcy on September 15, 2008. This event is often considered the catalyst for the global financial crisis, as it triggered a massive credit crunch and a subsequent stock market crash.
2. Washington Mutual
Washington Mutual, the largest savings and loan association in the United States, collapsed on September 25, 2008. The bank was seized by the Federal Deposit Insurance Corporation (FDIC) and sold to JPMorgan Chase for $1.9 billion.
3. Bear Stearns
Bear Stearns, another major investment bank, was on the brink of bankruptcy in March 2008. The Federal Reserve stepped in and arranged a $30 billion bailout, which was later acquired by JPMorgan Chase for $2 a share.
4. Merrill Lynch
Merrill Lynch, the world’s largest brokerage firm, was on the verge of bankruptcy in September 2008. It was later acquired by Bank of America in a $50 billion deal, marking the largest bank acquisition in U.S. history.
5. Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) that played a significant role in the U.S. mortgage market, were placed into conservatorship by the U.S. government in September 2008. This move was aimed at stabilizing the housing market and preventing a wider financial crisis.
6. AIG
American International Group (AIG), one of the world’s largest insurance companies, faced a liquidity crisis in September 2008. The U.S. government stepped in and provided a $182.3 billion bailout to prevent the company’s collapse, which would have had severe consequences for the global financial system.
These are just a few examples of the numerous companies that went bankrupt or were bailed out during the 2008 financial crisis. The crisis exposed the vulnerabilities of the global financial system and led to significant reforms in the financial industry to prevent such a disaster from happening again.
