Zombie Lehman wants $8.2 billion back from Barclays
A year after the former Wall Street titan blew up and touched off the global credit crisis, the rump Lehman has accused Barclays Capital of taking too much money (cough, $8.2 billion) when it bought some of the broker-dealer's key assets, the AP reported Wednesday.
The dispute highlights the absolute chaos that gripped the financial system a year ago, when major financial institutions were teetering or toppling left and right. Ordinarily, such deals require months of massive due diligence -- think teams of lawyers from multiple firms pouring over thousands of documents -- but when the financial system was falling apart, there was no time to ensure that $8.2 billion wouldn't fall through the cracks.
Lehman is asking the court to force Barclays to return some of the money the brokerage took when it bought Lehman's U.S. banking business less than a week after it filed for bankruptcy.
Lehman claims that Barclays took at least $5 billion in extra collateral and another $2.3 billion in margin deposits -- and that those features of the shotgun deal weren't disclosed to the court when it approved the purchase a year ago, the AP reported.
"Because of these undisclosed and unauthorized features of the deal, Barclays received billions more than the value it paid," lawyers for the rump Lehman argued to the court.
"The number may be even larger" than $8.2 billion, Lehman argued to a judge for the Southern District of New York, the AP reported.
As they say, a billion here and a billion there, and pretty soon you're talking about real money.