Since Lehman Brothers Holdings Inc. (NYSE: LEH) filed for bankruptcy this morning, it means that its assets will be sold and the proceeds will go first to lenders and bondholders. If there's anything left after paying them off, it goes to the preferred shareholders. Finally, the common shareholders get the leftovers of the preferred shareholders.

This bankruptcy is the biggest in history as measured by its $639 billion in assets -- over six times bigger than the former champ, WorldCom. The bankruptcy does not include all Lehman's assets. "The Chapter 11 filing did not include Lehman's broker-dealer operations and other units, such as asset management firm Neuberger Berman. Those businesses will continue to operate, although Lehman is expected to liquidate them. It said it is in advanced talks on selling its investment management division," according to Reuters.

Many big institutions will be first in line for the proceeds of these asset sales. "Its biggest unsecured creditors are Citigroup Inc. (NYSE: C), Bank of New York Mellon Corp (NYSE: BK), Aozora Bank, and Mizuho Financial Group Inc.. Citi and Bank of New York Mellon are trustees for Lehman bonds. As of May 31, it owed about $110.5 billion on account of senior unsecured notes, about $12.6 billion on account of subordinated unsecured notes and about $5 billion on account of junior subordinated notes."