Barclays reviewed over price paid for Lehman assets

by Gill Montia

Story link: Barclays reviewed over price paid for Lehman assets

Barclays could be required to top up the £1.1 billion it paid for certain Lehman Brothers assets.

During the financial storm of last September, Barclays took part in talks aimed at saving the Wall Street investment bank from bankruptcy.

Days after walking away from discussions, the group announced that it was acquiring the collapsed Lehman Bothers’ prestigious New York headquarters; its investment banking and capital markets businesses and two data centres.

Lawyers involved in winding up Lehman Brothers have now asked a New York court now to decide if the deal overestimated of the liabilities that Barclays would have to cover and thus handed the latter a windfall profit.

The arguments centre on the valuation of bonus liabilities and other contractual costs and the fact that Barclays reported a £2.26 billion gain from the acquisition at the end of last year.

Bob Diamond, head of Barclays Capital, described the deal as a “once in a lifetime opportunity” but the immediate gain to Barclays has raised questions about the price paid.