Business of… the world’s biggest bankruptcies
The first ever bankruptcy of a UAE developer is underway with a deadline for claims of Friday. Kipp was inspired to look at some of the planet’s biggest insolvencies.
January 5, 2011 2:24 by shafeer
Drexel Burnham Lambert Group
When investment firm Drexel Burnham Lambert Group filed for bankruptcy protection under Chapter 11 in 1990, it employed more than 5,300 employees, had $3.6 billion in assets and 152 years of experience in the field. The news was particularly harsh for Drexel’s staff, as 54 percent of Drexel’s stock was owned by the firm’s employees, who saw the value of their shares vanish into thin air.
So what was at the core of the fall? Junk bonds, according to TIME: “Drexel’s notorious junk bonds – debt instruments that pay high rates of interest because of the relative shakiness of the ventures they fund – turned the financial world topsy-turvy and helped set the tone for the money lust that gripped America in the ’80s.”
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