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Lehman sues Barclays over deal

Sep 16 2009 09:54

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San Francisco - Lehman Brothers has accused Barclays Capital of taking $8.2bn more than it should have when it bought key assets of the failed investment bank a year ago.

Lehman made its claim in a court filing on Tuesday, the one-year anniversary of its chaotic bankruptcy filing. The court approved the sale of its US banking business to Barclays less than a week after it filed.

Now Lehman wants a judge to force Barclays to give back some of the money it took as part of the deal, including $5bn it said was given as extra collateral. Lehman said the extra value was not disclosed to the court.

"Because of these undisclosed and unauthorised features of the deal, Barclays received billions more than the value it paid," Lehman lawyers wrote in an argument to the court.

A Barclays spokesperson, Michael O'Looney, said Lehman is simply making "an opportunistic claim".

"Now that the economy has begun to stabilise the Lehman Estate is trying to re-trade the deal on the basis of a meritless argument," O'Looney said by e-mail.

Lehman said Barclays took the $5bn as well as another $2.3bn in margin deposits on its Options Clearing accounts, and about $2.7bn in other assests added before the court's approval of the sale. It said Barclays took on about $1.7bn in liabilities.

"The number may be even larger" than $8.2bn, Lehman lawyers wrote in their brief, saying there were other assets that Lehman has yet to calculate.

The are also likely being explored in an independent investigation by Anton Valukas, a lawyer at the Jenner & Block law firm who was appointed as the examiner in the case.

Valukas, a former federal prosecutor and a specialist in white-collar crime, started his investigation in January and has yet to file his report. He will determine, in part, whether Lehman executives lied, committed fraud or mismanaged the company.

Lehman Brothers Holdings' bankruptcy case was filed in the Southern District of New York. The filing marked the end of what was once the nation's fourth-largest investment bank.

- AP

 
 
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