Filing for bankruptcy is no longer a
measure that individuals use to regain control over their financial situation.
It is also a measure that businesses, financial entities, and even
municipalities are considering as a way to deal with serious financial
troubles. Here are the five biggest bankruptcies ever filed in the United
States as well as lessons that you can learn in assessing your own financial
situation.
Lehman Brothers
Lehman Brothers Holdings filed for
bankruptcy in 2008, and the filing was a shock to the business world. Prior to
its filing, Lehman Brothers had over $690 billion in assets. The American
public was able to learn about the dangers of subprime lending and the need
for professional ethics in the world of investment banking. This case also
shows the public that even highly prestigious organizations need to file for
bankruptcy, thus taking away any stigma that is attached to this legal process.
Washington Mutual
Before its bankruptcy filing, Washington
Mutual had $328 billion in assets. Washington Mutual was once a trusted bank
for savings accounts and loans. After its filing, over $16 billion in deposits
were withdrawn. This case showed Americans that even trusted banks can fail and
how important it is to manage one's accounts with financial entities in good
standing.
Worldcom
Worldcom filed for bankruptcy after it was
discovered that the company engaged in an accounting scandal worth over $11
billion. Verizon Wireless ultimately acquired the company. This case showed
that it never pays to resort to criminal activity as a way to avoid one's
financial situation. It is better to face one's financial situation and even
file for bankruptcy than try to evade the law.
General Motors
General Motors had over $91 billion in
assets before filing its bankruptcy. The government bailed out G.M., and as a
result, it has a 73 percent interest in the company. This case showed Americans
that sometimes the government must protect organizations that significantly
contribute to the employment of thousands of workers.
CIT
CIT was another financial firm that was
forced to file for bankruptcy after the financial crisis. It was also involved in the
subprime mortgage lending process. When the market crashed in 2007, the
company no longer could profitably engage in its investment scheme.
If you are thinking about filing for
bankruptcy, then you should realize that it is more common than ever. The
attorneys at Lynch &
Belch P.C. are prepared to assess your situation and help you.
In conclusion, the notable bankruptcies of Lehman Brothers, Washington Mutual, Worldcom, General Motors, and CIT serve as significant lessons for individuals and businesses alike in assessing their financial situations. These cases underscore the importance of financial transparency, ethical business practices, and prudent management.
The Lehman Brothers bankruptcy highlighted the risks associated with sub-prime lending and emphasized the need for ethical conduct in investment banking. Similarly, the downfall of Washington Mutual revealed the vulnerability of even trusted financial institutions, emphasizing the importance of managing accounts with reputable entities.
The Worldcom scandal underscored the consequences of fraudulent activities, emphasizing the importance of facing financial challenges head-on rather than resorting to illegal measures. General Motors' bailout demonstrated the government's role in safeguarding vital organizations and preserving employment opportunities.
Lastly, CIT's bankruptcy illustrated the repercussions of risky investment strategies, particularly in the wake of the financial crisis. These cases collectively emphasize the need for individuals and businesses to proactively manage their finances, seek legal guidance when necessary, and make informed decisions to avoid financial pitfalls.
As bankruptcy becomes increasingly common, individuals facing financial distress should seek professional assistance, such as the legal services provided by Lynch & Belch P.C., to evaluate their options and navigate the bankruptcy process effectively. By learning from these notable bankruptcies, individuals, and businesses can better understand the implications of their financial decisions and take proactive steps to secure their financial future.
