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Barclays Takeover Of Lehman Us Assets Cleared In New York Court

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http://www.guardian.co.uk/business/2011/feb/23/barclays-takeover-lehman-brothers-cleared-in-court

Claims that Barclays illegally took advantage of pandemonium in the financial markets in order to acquire the US operations of bust investment bank Lehman Brothers at an unfair price in 2008 have been thrown out by a bankruptcy court judge in New York.

Describing the sale process as "imperfect, but still adequate under the exceptional circumstances," Judge James Peck threw out a claim brought by lawyers overseeing the Lehman Brothers bankruptcy estate.

Shares in Barclays rose 2.25p to 324p by 9am, one of just a handful of FTSE 100 stocks to register gains as the equity markets retreated in the wake of the Libyan crisis.

Ian Gordon, a banks analyst at Exane BNP Paribas, said: "Barclays is to be congratulated for its steadfast approach throughout this long-running saga. Whereas one might be tempted to suggest that this was a speculative action which was always bound to fail, we have no doubt that the unquantified litigation risk weighed heavily in the minds of many would-be Barclays investors."

Claimant lawyers had alleged Barclays engaged in dishonest and abusive behaviour during the sale process which led to the bank improperly receiving an $11bn (£6.78bn) windfall from the transformational deal.

One of their central allegations was that Lehman bankers hurriedly putting sale valuations on the failed banks' assets may have been influenced by the prospect of future employment with Barclays.

But in a 103-page ruling, Judge Peck dismissed these claims, finding that Barclays had acted in good faith throughout.

"The court does not believe that any Lehman employees breached their duties of loyalty to the estate because of the prospect of future employment or as a consequence of signing lucrative employment contracts with Barclays. That aspect of the movants' [claimants'] case is built on a faint aroma of venality and conflicted loyalty, but no breach of duty or other misconduct was demonstrated."..

more at ze link, herr kapitan...

"regarded by many as an admirable, even heroic, achievement".

Spike Milligan, alive and well in a new york courthouse.

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"regarded by many as an admirable, even heroic, achievement".

Spike Milligan, alive and well in a new york courthouse.

Why should we assume that Barclays was the beneficiary in this transaction? Is there any evidence that it wasn't a monumental mistake - prompting those trying to wring everything out of Lehman to wonder if Barclays could be even more gullible - and force them to pay again?

Just wondered...

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Why should we assume that Barclays was the beneficiary in this transaction? Is there any evidence that it wasn't a monumental mistake - prompting those trying to wring everything out of Lehman to wonder if Barclays could be even more gullible - and force them to pay again?

Just wondered...

Could be.

Thing is, the case wou8ld only be brought if they'd benefited, if they'd lost it's not like they'd be taken to court and have money thrust at them or anything...is it?

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103 page ruling.

since when has found for or against been less than adequate.

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Guest sillybear2

Barclays, the new lazarus.

They were (and still are) massively over-leveraged but fortunately not the first to fail. The authorities kept a de facto insolvent Barclays alive via a backdoor bailout and by allowing false accounting, that was the lesser of two evils compared to yet another politically embarrassing direct bailout.

Edited by sillybear2

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Barclays, the new lazarus.

They were (and still are) massively over-leveraged but fortunately not the first to fail. The authorities kept a de facto insolvent Barclays alive via a backdoor bailout and by allowing false accounting, that was the lesser of two evils compared to yet another politically embarrassing direct bailout.

...are the bonuses linked to this 'false accounting'....is this the new 'big bang'.....?.... :unsure:

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Guest sillybear2

Why should we assume that Barclays was the beneficiary in this transaction? Is there any evidence that it wasn't a monumental mistake - prompting those trying to wring everything out of Lehman to wonder if Barclays could be even more gullible - and force them to pay again?

Just wondered...

Lehman cost them $1.85bn and they picked up $5bn of assets including a $2.5bn bonus pool (rewards for failure much?), they also secured their position in the state side cartel with even less competition around. Acquiring ABN would have broke them, this made them, especially when the govt were afraid of any new failures and did everything to help.

...are the bonuses linked to this 'false accounting'....is this the new 'big bang'.....?.... :unsure:

Say you have $1bn of crappy assets on your books priced at 50 cents on the dollar fair value, then the central bank nails interest rates to the floor and prints money, they now have a "fair value" of 75 cents (according to your nice models), so bingo you can book a $500m profit, bonuses all round! The same applies in reverse, you keep pretending an asset is still worth whatever you previously marked it at.

Edited by sillybear2

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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