Bloomberg News

Lehman Appeals Order in $11 Billion Barclays ‘Windfall’ Case

July 29, 2011

(Updates with judge’s final orders in second paragraph.)

July 29 (Bloomberg) -- Lehman Brothers Holdings Inc. appealed a judge’s order that it couldn’t recover an alleged $11 billion “windfall” made by Barclays Plc when the London- based bank bought defunct Lehman’s North American business.

U.S. Bankruptcy Judge James Peck signed final orders on July 15 denying Lehman’s bid to recoup money from Barclays. Lehman filed its notice of appeal yesterday.

Earlier this month, the trustee overseeing the liquidation of Lehman’s brokerage appealed Peck’s ruling that awarded Barclays $1.1 billion, while ordering Barclays to return $2 billion in margin assets to the brokerage. Barclays has appealed that part of the ruling.

The dispute, arising from Barclays’s September 2008 purchase of bankrupt Lehman’s businesses and subsequent profit on them, led to a bankruptcy court trial in 2010 with more than 30 days of testimony. The trial pitted the third-biggest U.K. bank against two defunct parts of what was once the fourth- largest U.S. investment bank.

The main case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Michael Hytha, Mary Romano

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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