Bloomberg News

Lehman Brokerage Seeks $346 Million From RBS Over Swap

June 30, 2011

(Updates with excerpt from filing in third paragraph.)

June 30 (Bloomberg) -- Lehman Brothers Holdings Inc.’s brokerage asked a judge to force Royal Bank of Scotland Group Plc to pay $346 million owed to the defunct firm.

ABN Amro, now owned by Royal Bank, owes the money, plus interest, to Lehman Brothers Inc. for early termination of a 1998 swap agreement, the brokerage said in a filing in U.S. Bankruptcy Court in Manhattan. Royal Bank refuses to pay, saying it has a right to set off the funds against amounts owed to it by the brokerage and its affiliates, brokerage trustee James Giddens said in yesterday’s filing.

“The trustee has a right to recover the withheld funds based on simple and straightforward principles of contract law,” he said.

Pholida Phengsomphone, a spokeswoman in Connecticut for Edinburgh-based Royal Bank, declined to comment.

The Lehman brokerage, like its bankrupt parent, is seeking money from banks it did business with to pay customers. Citigroup Inc. last month asked a judge to dismiss most of a $1.3 billion lawsuit brought by Giddens, saying he had no legal claim on most of the money.

Barclays Plc has said it will appeal a judge’s order that it return $2 billion in margin assets to Giddens and pay about $270 million in interest.

The Lehman parent filed the largest bankruptcy in U.S. history on Sept. 15, 2008. The brokerage went into liquidation four days later.

The brokerage bankruptcy case is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Stephen Farr, Mary Romano.

To contact the reporter on this story: Linda Sandler in New York at

To contact the editor responsible for this story: John Pickering at

The Good Business Issue
blog comments powered by Disqus