Britain's Office for National Statistics said 17,341 people declared bankruptcy in the three months through September — up from 15,842 in the same quarter of 2007. The number of bankruptcies was 12 percent higher than it was in the previous quarter.

British companies were hit even harder by the economic downturn, the statistics office said, with 26 percent more businesses — or 4,001 — going under in the third quarter of this year than did last year.

Britain's economy contracted 0.5 percent last quarter and the Bank of England expects the country will be in a technical recession — defined as two or more consecutive quarters of negative growth — by the beginning of next year.

Some legal experts say the case, in which a criminal case in Connecticut intersects a bankruptcy judgment filed in St. Louis, shows a need for Congress to revise the nation's bankruptcy laws to better treat people who are awarded money as part of ruling in a criminal case.

"This is an outrageous decision," said Anthony Sabino, a law professor at St. John's University and a bankruptcy expert. "I think it's a miscarriage of justice."

"I can't even begin to fathom it," Poveromo said. "Crime does pay."

The case began in 2006, when Poveromo hired Mark R. Koch of Illinois for an $80,000 project to construct a building for his pet food business in Thomaston, Conn. Poveromo paid $39,500 up front, but Koch never did any work, according to court documents.

Poveromo filed a criminal complaint, and Koch was convicted in Connecticut of first-degree larceny in April 2007 and ordered to pay restitution. Koch paid $25,000 and began monthly payments to Poveromo on the balance, but that's when the law turned on Poveromo.

Two months before his conviction, Koch filed for bankruptcy protection in St. Louis, halting any monetary claims against him. Poveromo says notices of the bankruptcy filing was sent to Poveromo's old business address and he didn't see them.

Koch then filed a complaint to the bankruptcy court accusing Poveromo of intentionally violating the stay on claims by having him arrested to collect on his debt.

Judge Charles Rendlen III agreed with the builder. In a ruling filed in December, and without hearing from Poveromo, Rendlen noted "the highly suspect timing" of Koch's arrest and conviction after filing for bankruptcy.

The investment bank, which filed the biggest U.S. bankruptcy case on Monday, has on its agenda for the meeting Tuesday afternoon a motion that seek a judge's approval to sell certain assets.

The Wall Street Journal was reporting on its Web site that Lehman was close to reaching a deal to sell its U.S. broker-dealer unit to Barclays.

The hearing was scheduled to be held at the U.S. Bankruptcy Court in the Southern District of New York, before Judge James Peck.

The filing was made in the U.S. Bankruptcy Court in the Southern District of New York by Lehman Brothers Holdings Inc., the bank's holding company. The case had not yet been assigned to a judge.

Lehman's last hope of surviving outside of court protection faded Sunday after British bank Barclays PLC withdrew its bid to buy the investment bank.

Lehman learned at a last-minute meeting on Friday with federal officials that it would not be getting any emergency funding to give it the liquidity it needed, Chief Financial Officer Ian Lowitt said in an affidavit.

Lehman fell under the weight of $60 billion in soured real estate holdings and tighter a credit market that forced it to seek court protection.

As the company's financial health deteriorated over recent months, Lowitt said Lehman had "explored various options to restructure operations, reduce overall cost structure, and improve performance." He said executives took a two-pronged approach to saving the company: selling its investment management division and separating troubled real estate assets from the rest of the company.

"Management believed that divorcing the real estate assets from the rest of the company would relieve the pressure on the company," he said in the affidavit.

In an effort to calm the markets, Lehman announced its third-quarter results on Wednesday — a week earlier than planned — but Lowitt said that "did little to quell the rumors in the markets and the concerns about the viability of the company."

He said the uncertainty made it impossible for Lehman to continue outside of court protection.

The filing had been made so hastily that the company had not yet filed motions by Monday morning that are typically made on the first day, such as asking the court for permission to continue paying employees.

Many Lehman employees seen entering its headquarters in Midtown Manhattan tucked their chins down to avoid talking to the media and others who had lined up behind metal barriers in front of the building.

Some carried empty shopping, tote bags or gym bags in to the office. Some walked in with ties undone or wore more casual polo shirts than they may have otherwise.

Filing for Chapter 11 protection allows a company to restructure while creditor claims are held at bay. The company most likely chose to file under Chapter 11, rather than a Chapter 7 liquidation, so that it could retain more control over the selling off of assets, said Stephen Lubben, the Daniel J. Moore professor of law at Seton Hall Law School. In a Chapter 7 filing, the court would immediately appoint a trustee to take over the case.

"I'm sure they think they could conduct a better liquidation themselves, and that's probably true," Lubben said.

The investment bank had said earlier that none of its broker-dealer subsidiaries or other units would be included in the Chapter 11 filing. It says it is exploring the sale of its broker-dealer operations and is in "advanced discussions" to sell its investment management unit. That means customers of its broker-dealers will not be subject to claims by creditors in the bankruptcy case.

In its bankruptcy petition, Lehman listed Citigroup among its biggest unsecured creditors, with about $138 billion in bonds as of July 2. The Bank of New York Mellon Corp. was listed as holding about $17 billion in debt.

Lehman said that as of May 31, it had assets of $639 billion and debt of $613 billion.

Seven months after Michael Vick was sentenced to federal prison, the fallen Falcons quarterback found himself in a “precarious financial position” and filed for bankruptcy. One of his creditors is the Falcons.

In Chapter 11 documents filed in federal court in Virginia on Monday, Vick cites debts of between $10million and $50million. He also cites assets in the same range.

In the court documents, Vick lists seven creditors, including the Falcons, that are owed a total of $12.8million. The debt to the Falcons is for $3.75million, listed as a prorated signing bonus. The documents indicate the claim is disputed.

A Falcons spokesman said the team would not comment on Vick's bankruptcy.

Vick is serving a 23-month sentence in Leavenworth, Kan., for his guilty plea in federal court to felony charges related to dogfighting. His release date is July20, 2009.

The largest of Vick's creditors is Joel Enterprises with a claim of $4.5million. Andrew Joel, a Richmond, Va., sports agent, filed a lawsuit against Vick in 2006 claiming he reneged on an endorsement deal agreed upon after he left Virginia Tech early for the NFL.

Another creditor listed is Radtke Sports, of Woodstock, Ga., for $550,000. According to the attorney for Radtke Sports, which sells sports memorabilia, Vick had an exclusive autograph deal with the company and he can no longer fulfill his obligation because of his imprisonment.

Vick filed Chapter 11 papers in U.S. Bankruptcy Court in Newport News on Monday. The seven largest creditors listed in the court papers are owed a total of about $12.8 million.

Vick is serving a 23-month prison sentence at the U.S. Penitentiary in Leavenworth, Kansas, after pleading guilty last year to bankrolling a dogfighting ring. He was subsequently suspended indefinitely without pay and lost all his major sponsors, including Nike. He also faces state charges related to dogfighting.

According to the filing, the debt includes a $3.75 million prorated signing bonus the Atlanta Falcons are seeking to recover.

Plastech Engineered Products Inc., which supplies Chrysler with about 500 plastic interior, exterior and powertrain components for nearly all of its vehicles, filed for Chapter 11 bankruptcy protection on Friday after the automaker told the supplier it was seeking other sources for the parts.

The dispute cut the flow of parts from the Dearborn-based Plastech to Chrysler, and the company on Monday was forced to shut down four factories and cut a shift at a fifth.

Chrysler sued Plastech in U.S. Bankruptcy Court in Detroit, and the both sides were in court Monday but were unable to resolve the matter, a person briefed on the negotiations said. Talks went into the evening and recessed until Tuesday morning, when further court action was scheduled, said the person, who requested anonymity because the talks are confidential.

Chrysler is seeking an immediate resumption of parts production as well as the tools to make the parts, which it owns. Without the tools, Chrysler said in its lawsuit that it eventually will have to cease production of vehicles systemwide.

The automaker terminated its contracts with Plastech on Friday.

Plastech's contracts with the automaker were worth about $200 million, Plastech spokesman Kelvin Scott said. Plastech does about $1.3 billion in total business.

"We are continuing to supply parts to our other customers, including Ford and GM," he said.

One industry analyst said the production slowdown may be short because Chrysler should have little trouble finding new companies to replace Plastech.

Faced with stiff competition and a shrinking market, many suppliers are willing to take on work if it means getting contracts, said Craig Fitzgerald, a partner in Plante & Moran's Strategy and Global Services Group.

In its lawsuit filed Friday, Chrysler claimed Plastech no longer can meet its production demands.

On Monday Chrysler temporarily closed the four assembly plants and shut down one shift at another, affecting about 10,500 workers.

Plants closed are in Sterling Heights, Mich.; Newark, Del.; Toledo, Ohio; and Belvidere, Ill., while the second shift at Toledo Supplier Park in Toledo was dismissed, the company said.

Of the vehicles made at the affected factories, the Dodge Durango sport utility vehicle had the lowest supply in January, at 46 days, according to Wards AutoInfoBank. The largest supply is the Jeep Wrangler, at 117 days.

Although Chrysler has an inventory of vehicles made by the plants, it will not benefit from any plant closures, said Aaron Bragman, an auto industry analyst for the consulting company Global Insight.

"When a plant is idle, you're not making any money. You've got people standing around, so it's just a cost," he said.

Auto companies want enough inventory to have a buffer and don't want it to become depleted, Bragman said. Chrysler has reduced its inventory substantially since it became bloated last year, he said.

Even if Chrysler lays off workers, they would still get most of their pay under their contract with the United Auto Workers.

Overall, the company had 413,874 vehicles in its inventory last month, a 75-day supply, according to Ward's.

The shutdowns are having a ripple effect as auto parts maker Dana Corp. canceled Monday night's second-shift at its modules plant in Toledo. About 150 people work at the plant, which supplies drivetrain parts for Chrysler's Toledo Jeep plant.

Employees at the Sterling Heights stamping plant were sent home early Friday night and after four hours of work Monday, union steward Russell Phillips said.

"We have no extra stock," said Phillips, who adds that Chrysler works on a "just-in-time" policy for parts delivery.

"Most of (the workers) are saying 'this is what they get for not wanting to keep stock in the house,'" Phillips said.

Chrysler employees will be notified of return-to-work schedules from plant officials or through local media, the automaker said.

Plastech has 36 facilities and 7,600 employees in the United States and Canada.

Engine covers, grill panels, moldings, metal stampings, door panels, floor consoles and safety restraint system components are some of the parts Plastech supplies to Chrysler, Ford Motor Co., General Motors Corp. and Toyota Motor Corp., according to the company's Web site.

Ford was still getting parts from Plastech and was unaffected by the dispute, Ford President of the Americas Mark Fields told reporters Monday night.

Chrysler's work shutdown should last no more than a week or two, Fitzgerald said.

"I think they will not have any problems filling the void," he said. "There is a lot of excess capacity. Chrysler would do everything it can to get up and running."