Tags: Lehman | Barclays | Windfall | Sale

Lehman Says Barclays Got $13 Billion Windfall in Sale

Thursday, 18 Mar 2010 02:03 PM


Lehman Brothers Holdings Inc. fired new allegations at Barclays Capital Inc. on Thursday, saying the British investment bank got a $13 billion "windfall" profit from its deal to buy Lehman's U.S. brokerage in September 2008.

In documents filed in U.S. bankruptcy court in Manhattan, Lehman claimed new evidence showed that while Barclays said it had a "day one" accounting gain of $4.2 billion on the Lehman acquisition, in reality it received a $13 billion windfall "immediately upon acquisition."

Lehman filed for bankruptcy on Sept. 15, 2008, the largest U.S. bankruptcy filing in history. Its flagship U.S. brokerage business was sold to Barclays for about $1.85 billion less than a week later in a hurriedly arranged deal.

Lehman said the deal presented to the court was not the one that was actually executed. Lehman employees who had been offered new jobs at Barclays had arranged for Barclays to get a $5 billion discount on Lehman's $70 billion book of securities, Lehman claimed.

"The 'negotiated' sale price for the assets had nothing to do with 'book value' and contained an embedded $5 billion gain for Barclays that was not disclosed," Lehman's attorneys at Jones Day wrote.

Lehman also claimed that Barclays knew its purchase agreement required $2 billion to be spent on bonuses to former Lehman employees, but in reality Barclays has only paid $1.55 billion.

A spokesman for Barclays was not immediately available to comment, but the bank previously said it believes Lehman and its creditors are trying to "re-trade" the deal now that markets have stabilized.

A court hearing on Lehman's dispute with Barclays is set for April 9, according to court documents.

© 2015 Thomson/Reuters. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Mali's Islamists Withdraw Cease-Fire Pledge

Friday, 04 Jan 2013 13:06 PM

Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they we . . .

Fmr. CIA Director Hayden: Iran Nuclear Crisis Gets 'Scarier'

Tuesday, 17 Jul 2012 18:11 PM

 . . .

Join Fmr. CIA Director for Special Iran Briefing, Assess the Danger

Friday, 13 Jul 2012 12:27 PM

 . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved