Lehman-Barclays got US$13b windfall

Lehman Brothers Holdings fired new allegations at Barclays Capital on Thursday, saying the investment bank got a US$13 billion ($18 billion) "windfall" profit from its deal to buy Lehman's US brokerage in September 2008.

In documents filed in US bankruptcy court in Manhattan, Lehman claimed new evidence showed that while Barclays said it had a "day one" accounting gain of US$4.2 billion on the Lehman acquisition, in reality it received a US$13 billion (8.5 billion pound) windfall "immediately upon acquisition."

Lehman filed for bankruptcy on September 15, 2008, the largest US bankruptcy filing in history. Its flagship US brokerage business was sold to Barclays for about US$1.85 billion less than a week later in a hurriedly arranged deal.

Lehman said the deal presented to the court was not the one that was actually executed. Lehman employees who had been offered new jobs at Barclays had arranged for Barclays to get a US$5 billion discount on Lehman's US$70 billion book of securities, Lehman claimed.

"The 'negotiated' sale price for the assets had nothing to do with 'book value' and contained an embedded US$5 billion gain for Barclays that was not disclosed," Lehman's attorneys at Jones Day wrote.

Lehman also claimed that Barclays knew its purchase agreement required US$2 billion to be spent on bonuses to former Lehman employees, but in reality Barclays has only paid US$1.55 billion.

A spokesman for Barclays was not immediately available to comment, but the bank previously said it believes Lehman and its creditors are trying to "re-trade" the deal now that markets have stabilised.

A court hearing on Lehman's dispute with Barclays is set for April 9, according to court documents.

- Reuters