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Lehman trustee petitions U.S. Supreme Court over Barclays dispute

Published 15/12/2014, 17:24
© Reuters. A couple walks past a Barclays branch in downtown Rome
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(Reuters) - The trustee handling the liquidation of the brokerage unit of Lehman Brothers Holdings Inc filed a petition with the U.S. Supreme Court on Monday seeking review of the business's cash assets awarded to Barclays Plc (L:BARC).

Lehman, once Wall Street's fourth-largest investment bank, had $639 billion (408 billion pounds) of assets when it filed for Chapter 11 protection in September 2008. The British bank won court approval to buy much of Lehman's brokerage business.

Trustee James Giddens, who has been seeking to recoup money for the brokerage's creditors, said lower court rulings granting margin assets to Barclays breached bankruptcy rules.

Barclays declined to comment. The bank's shares closed down 3 percent on the London Stock Exchange on Monday.

A federal appeals court ruled in August that Barclays was entitled to about $6 billion of disputed assets.

These include $4 billion of margin assets held by third parties to support a Lehman exchange-traded derivatives business, and $1.9 billion of so-called clearance box assets used to process securities trades.

© Reuters. A couple walks past a Barclays branch in downtown Rome

U.S. Bankruptcy Judge James Peck said in 2011 that Barclays was entitled to the clearance box assets, but not the margin assets. District Judge Katherine Forrest, however, said in 2012 that Barclays deserved both.

(Reporting by Amrutha Gayathri in Bengaluru; Editing by Joyjeet Das)

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