(Updates with Lehman statement in third paragraph.)
Sept. 21 (Bloomberg) -- Lehman Brothers Holdings Inc., which is gathering creditor support for a $65 billion liquidation plan before a November vote, said it will drop its attempt to collect $11 billion from Barclays Plc in a dispute over the sale of Lehman operations in 2008.
Lehman also won’t appeal a Sept. 14 ruling by U.S. Bankruptcy Judge James Peck in Manhattan rejecting its claim that Barclays owed about $500 million for allegedly unpaid bonuses. Peck previously ruled against Lehman in the larger suit against London-based Barclays.
“While there are aspects of the decisions with which we do not agree, we are also cognizant of the burdens that continued litigation of these issues would place on the court and the assets of the estate,” the defunct firm said in a statement today.
After appealing Peck’s ruling in the bigger suit, Lehman said today it “respects the time and effort the court has devoted to the serious issues raised by the estate.” Because of the cost of continuing the litigation, Lehman said, “we have determined that we will not pursue these issues through appeals, believing that the resources of the court and the estate will be better employed at this point to move the bankruptcy toward a conclusion.”
Lehman, once the world’s fourth-biggest investment bank, has spent about $1.4 billion on lawyers and managers since its 2008 bankruptcy filing, the largest in U.S. history, with assets of $639 billion.
The New York-based firm’s bankruptcy became the most expensive in U.S. history in April 2010, when it topped the $757 million cost of energy trader Enron Corp.’s three-year liquidation, according to data compiled by Lynn LoPucki, a bankruptcy-law professor at the University of California, Los Angeles.
Lehman’s creditors range from banks and hedge funds to the New York Giants and Abu Dhabi Investment Authority, as well as individuals who hold Lehman bonds. Lehman filed for bankruptcy on Sept. 15, 2008.
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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