Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor (“involuntary bankruptcy”) in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a “voluntary bankruptcy” that is filed by the insolvent individual or organization).

There has been much furore in financial sphere over the recent revelation of misleading accounting techniques used by Lehman Bros.
An accounting trick, known as the Repo 105 aided financial relief to Lehman Brothers just before its supernova collapse. It now seems that the shenanigans spells used by them may cast a legal jeopardy for executives of Lehman and its auditors Ernst & Young.
The implosion of Lehman Brothers Holdings Inc. into the biggest bankruptcy in U.S. history in September 2008 led the financial meltdown that plunged the economy into the most severe recession since the 1930s, which now thankfully shows some signs of recovery.