The collapse of Lehman Brothers in 2008 was the largest bankruptcy in U.S. history. The case examines the economics of off-balance sheet transactions Lehman undertook prior to the collapse, and highlights the corporate governance challenges in situations where firms face capital market pressure and market downturns. In particular, the case examines the financial accounting, auditing and internal control practices around the Repo 105 transactions, which had a significant impact on th … Read more »

The collapse of Lehman Brothers in 2008 was the largest bankruptcy in U.S. history. The case examines the economics of off-balance sheet transactions Lehman undertook prior to the collapse, and highlights the corporate governance challenges in situations where firms face capital market pressure and market downturns. In particular, the case examines the financial accounting, auditing and internal control practices around the Repo 105 transactions, which had a significant impact on the leverage of the company. Based on the findings of the bankruptcy examiner report, the case focuses on the role that the management, external auditors and the audit committee of the amount played a significant loss of control.
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from
Anette Mikes,
Gwen Yu,
Dominique Hamel
Source: Harvard Business School
18 pages.
Release Date: 13 October 2011. Prod #: 112050-PDF-ENG
Lehman Brothers and Repo 105 HBR case solution

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