Lehman Brothers’ bankrupt estate sued Barclays Capital yesterday, claiming Barclays improperly made more than $5 billion from its purchase of Lehman’s North American brokerage business shortly after the bank entered bankruptcy last year.
DealBook: The lawsuit by the Lehman estate, which was widely expected, followed an inquiry by lawyers for the bankrupt firm that accused Barclays of secretly structuring the sale agreement to give it “an immediate and enormous windfall profit.” The result was that Barclays received $5 billion in assets, along with additional money in exchange for no additional consideration.
Lehman’s estate says the assets should be used to help repay the firm’s creditors.
The suit claims some Lehman executives knew that Lehman negotiators had agreed to give Barclays a $5 billion off-the-books discount, to be followed by additional “billions,” but did not disclose that information to Lehman’s board.
The plaintiff alleges Barclays aided and abetted the supposedly knowledgeable Lehman executives breach of fiduciary duty. The suit also includes claims for breach of contract, unjust enrichment and conversion, in addition to various violations of the bankruptcy code.
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