Bloomberg News

Barclays Demands $1.3 Billion in Lehman Brokerage Appeal

July 05, 2012

First Mover Barclays Pays Price for Industry Misdeeds on Libor

A pedestrian passes a Barclays Plc bank branch in London. Photographer: Jason Alden/Bloomberg

Barclays Plc (BARC) challenged a ruling in its court fight with defunct brokerage Lehman Brothers Inc., saying it has an “unconditional” right to $769 million that a federal judge denied and wants an additional $507 million in margin assets delivered immediately.

The London-based bank, which bought Lehman Brothers Holdings Inc.’s North American business during the 2008 credit crisis, won as much as $5.5 billion in last month’s ruling. U.S. District Judge Katherine Forrest ordered brokerage liquidator James Giddens to pay money owed to Barclays and renounce his claim to margin assets that backed trading operations the bank took over from Lehman.

Barclays now wants all of the remaining $1.3 billion in assets that are in dispute, according to an appeal to the U.S. Court of Appeals in Manhattan. A notice of appeal reached the district court today.

Barclays, the U.K.’s second-largest bank by assets, was fined a record 290 million pounds ($453 million) on June 25 for rigging Libor, a global benchmark interest rate. In the U.S., it successfully defeated an $11 billion lawsuit by Lehman Brothers Holdings.

Giddens Appeal

The bank continues to fight Giddens over the remains of the $7 billion he originally demanded from Barclays. The trustee said he didn’t read last-minute changes to the sale contract in the chaos after the Lehman parent filed the biggest bankruptcy in U.S. history, with $613 billion in debt.

Giddens also has appealed Forrest’s ruling, saying he needs money to pay hedge funds and other customers. Elliott Management Corp. last week demanded that Giddens make an initial $3.2 billion payment to creditors.

The Lehman parent, based in New York, is still buying and selling assets after exiting bankruptcy, with plans to pay creditors an average of about 18 cents on the dollar.

The district court case is Giddens v. Barclays Capital Inc., 11-cv-06052, U.S. District Court, Southern District of New York (Manhattan).

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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