Barclays faces lawsuit over Lehman Brothers gains

by Gill Montia

Story link: Barclays faces lawsuit over Lehman Brothers gains

Barclays is being sued by Lehman Brothers Holdings over $5 billion of assets acquired by the bank when Lehman Brothers collapsed in September of last year.

After walking away from discussions aimed at saving Lehman Brothers from bankruptcy, Barclays scooped up the investment bank’s New York headquarters, its investment banking and capital markets businesses plus two data centres, for around $1.75 billion.

Lehman Brothers’ liquidators have already raised questions about the deal and the lawsuit contains accusations that $5 billion of assets were secretly included in the agreement, giving Barclays an immediate windfall profit.

Lehman Brothers’ lawyers and board were allegedly kept in the dark about this aspect of the sale.

The case also questions the valuation of bonus liabilities transferred to Barclays, an issue initially raised in May of this year.