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Lehman Says Barclays Got $5 Billion Discount, Wants Assets Back

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Sept. 16 (Bloomberg) -- Lehman Brothers Holdings Inc. said Barclays Plc got a $5 billion discount when it bought the North American brokerage business and some real estate days after Lehman’s bankruptcy filing a year ago, and wants assets back.

“Material components of the transaction were not disclosed to the court before and at the sale hearing,†lawyers for Lehman said in a filing yesterday in U.S. Bankruptcy Court in Manhattan. “The fact is that the deal was actually structured to give Barclays an immediate and enormous windfall profit. Certain Lehman executives agreed to give Barclays an undisclosed $5 billion discount off the book value of securities.â€

Lehman said Barclays’ windfall may have been more than $8.2 billion when margin deposits and liabilities Barclays assumed are taken into consideration. Lehman filed the largest bankruptcy in U.S. history on Sept. 15 with assets of $639 billion.

The collapsed bank is asking U.S. Bankruptcy Judge James Peck to revise the deal and force Barclays to return assets to Lehman’s estate and give it the opportunity to pursue claims for breach of contract, breach of fiduciary duty and unauthorized transfer of assets.

‘Opportunistic Claim’

“This is an opportunistic claim,†Barclays spokesman Michael O’Looney said. “Now that the economy has begun to stabilize the Lehman Estate is trying to re-trade the deal on the basis of a meritless argument.â€

The committee representing Lehman’s unsecured creditors filed their own court papers, which were substantially redacted, saying Barclays should return assets to Lehman and its creditors.

James Giddens, the trustee liquidating Lehman’s brokerage on behalf of the Securities Investor Protection Corp., also filed court papers yesterday stating Barclays continues to assert claims for “billions of dollars of additional assets†beyond the $47.4 billion set in the sale pact.

“The transfer of these assets to Barclays would create an unfair windfall for Barclays at the expense of public customers,†Giddens said in a statement. “I am seeking to protect customer property and asking the court to reject and grant relief from Barclays’ claims.â€

Three cheers for the recovereh and compensation culture...

Wonder if Fuld is somehow behind this? "dude, where's my last bonus ever gone?" :lol:

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“This is an opportunistic claim,†Barclays spokesman Michael O’Looney said

Daily Mash looks more and more like mainstream media every day.

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