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Send back $8b, Lehman Brothers Europe tells parent
(Agencies)
Updated: 2008-09-22 09:47 NEW YORK -- Lehman Brothers in Europe has asked its US counterpart to give back more than $8 billion that it says was trapped when Lehman's holding company filed for bankruptcy protection in New York a week ago.
The money was moved to the US in a routine transaction that happens over the weekends, according to a complaint filed as part of Lehman's bankruptcy proceedings. After the funds moved to the US on Friday, September 12, they may not have moved back, since Lehman filed for bankruptcy, the biggest in US history, before dawn on the following Monday. The same day as the bankruptcy filing, Lehman in Europe put itself under administration, a bankruptcy-style liquidation process that is used in the UK and elsewhere. PricewaterhouseCoopers is the administrator in charge of winding down Lehman's European operations. In a court filing Friday, lawyers for Amber Capital Investment Management wrote that there's a risk the $8 billion will be included as part of the Barclays sale. "The proposed sale transaction with Barclays has moved at a rapid pace and parties have not had an opportunity to trace the LBIE cash and investigate the assets that are proposed to be transferred as part of the sale," the filing said. A lawyer for Bay Harbour Management LC, which has used Lehman as a prime broker, argued in court papers that the money may have been "misappropriated." The lawyer, David Rosner, said the money transfer "may have been manipulated to prop up LBI for sale," although he said there is no way of knowing whether this was the case. "The Barclays sale threatens to further dissipate the ability of LBIE's administrator and customers to recover their rightful property and to protect Barclays from claims to this cash," Bay Harbour lawyers said in their filing. |
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