June 23 (Bloomberg) -- Barclays Plc, after defeating an $11 billion lawsuit by Lehman Brothers Holdings Inc., seeks to dismiss the defunct firm’s remaining claim for $500 million in allegedly unpaid bonuses.
Lehman asked U.S. Bankruptcy Judge James Peck in May to order the U.K. bank to pay the rest of the $2 billion in bonuses it agreed to when it bought Lehman’s North American business in 2008. Barclays, which contended the $2 billion was an estimate of both bonuses and severance payments, said it paid everything assented to in the purchase agreement, according to a court filing yesterday.
The bonuses were due to Lehman employees whom Barclays took on with the purchase, the former investment bank said. The annual bonuses for the 2008 fiscal year should have paid in full by March 15, 2009, Lehman said in a May filing. Instead, the employees received $1.5 billion, it said.
According to Barclays, its obligation was to pay 100 percent of “bonus pool amounts accrued” by Lehman employees it took on with the purchase for the year 2008. Lehman said in court last year that the amount accrued and payable was from $700 million to $1.3 billion, or less than the $1.5 billion it now complains was insufficient, Barclays said in the filing.
“Thus, LBHI has admitted that Barclays paid bonuses in an amount that exceeded the amount required” by the sale contract, it said.
Kimberly Macleod, a Lehman spokeswoman, didn’t immediately return a voice-mail message seeking comment after regular business hours yesterday.
Lehman spent $1.3 billion through May on fees to managers, lawyers and other advisers since filing for bankruptcy in September 2008, according to a regulatory filing.
Peck ruled in February that London-based Barclays, which bought Lehman’s business in the 2008 credit crisis, need not pay an alleged $11 billion “windfall” made on the purchase. There was no “deliberate withholding of material information or willful misconduct,” as Lehman alleged, Peck wrote in his ruling after a nonjury trial.
Separately, the Lehman brokerage sued Barclays to recover $7 billion in margin and other assets. Earlier this month, Peck ordered Barclays to return $2 billion in margin assets to the trustee liquidating the remains of the brokerage, and pay about $270 million in interest. Barclays said it would appeal the ruling.
Lehman, which filed the biggest bankruptcy in U.S. history, with assets of $639 billion, is competing with two creditor groups to devise a payment plan. The brokerage is being liquidated separately.
The $2 billion number was listed on a financial schedule for “Comp,” a category “broader than just bonus,” which included severance payments Barclays had to pay, the bank said.
Also, Lehman “has failed to demonstrate that it suffered any damages as a result of the alleged breach,” Barclays said.
The main case is In re Lehman Brothers Holdings Inc., 08- 13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan). Lehman’s lawsuit against Barclays is Lehman v. Barclays, 09-01731, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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