Lehman Brothers 'was insolvent for weeks'

Lehman Brothers had been insolvent for weeks before it filed for bankruptcy in September 2008.

This is one of the findings of a new report into who is to blame for the collapse of the financial institution at the start of the economic downturn, which also revealed that accounting gimmicks were being used by senior managers.

The court-appointed examiner Anton Valukas also criticised audit firm Ernst & Young over how it handled the Lehman Brothers case, stating that there is enough evidence to argue that the company has been ’negligent’ and that Lehman could make claims on the grounds of ’professional malpractice’.

However, he said there was no evidence of extensive wrong-doing and stated those who were responsible for the firm had been running it using their business judgement and could not be held accountable for its collapse, which made it one of the first major victims of the credit crunch and subsequent global recession.
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