Statement from the Office of James W. Giddens, Trustee for the Liquidation of Lehman Brothers Inc. Under the Securities Investor Protection Act: Trustee's Complaint Against Barclays and Barclays Opposition Memorandum
NEW YORK, March 18 /PRNewswire-USNewswire/ -- The Office of the Trustee for the Liquidation of Lehman Brothers Inc. (LBI), the broker-dealer of Lehman Brothers, made the following statement today upon filing a response to Barclays Capital's opposition to the Trustee's lawsuit over disputed assets.
The Trustee filed a lawsuit in the U.S. Bankruptcy Court for the Southern District of New York on November 19, 2009, seeking recovery of approximately $6.7 billion in disputed assets that Barclays is claiming at the expense of the LBI estate. In today's filing, the Trustee is asking the Court to have the agreement for the sale of Lehman Brothers' Inc.'s brokerage business to Barclays enforced in accordance with the law and its terms as presented to the Trustee, the regulators, thousands of interested parties and the Bankruptcy Court on September 19, 2008.
Today's filing by the Trustee makes clear the parties did not agree to transfer the disputed assets and the Bankruptcy Court never approved the transfer. Barclays is seeking to reinterpret the deal at the direct expense of customers the transaction was supposed to protect.
The Trustee agreed to the sale of Lehman Brothers Inc.'s brokerage business to Barclays on the understanding that it was consistent with the deal that was presented to the Court and faithful to the fundamental principle of protecting customers and ensuring sufficient assets to satisfy customer claims. The disputed assets are needed to satisfy the claims of customers the Trustee was appointed to protect, and, in the case of certain assets, a transfer to Barclays would cause a violation of the Securities Investor Protection Act and the Securities and Exchange Commission's Customer Protection Rule.
The Trustee rejects Barclays' argument that a potential shortfall for public customers is not legally relevant and notes that the Trustee, along with SIPC and various regulatory authorities supported the sale of Lehman to Barclays because, at a time of great financial tumult in the United States markets, the sale was supposed to protect LBI's customers. If Barclays were to prevail, the transfer of these assets would expose public customers to loss of their property and provide a windfall for Barclays.
Media Contact for the Trustee: Kent Jarrell, 202-230-1833
Note to Editors:
The liquidation of Lehman Brothers Inc. (LBI), the broker-dealer of Lehman Brothers, is overseen by the LBI Trustee, Hughes Hubbard & Reed partner James Giddens. The Trustee was appointed by the United States District Court for the Southern District of New York. On September 19, 2008, the Court entered an order granting the application of the Securities Investor Protection Corporation (SIPC) for issuance of a Protective Decree adjudicating that the customers of LBI are in need of protection afforded by the U.S. Securities Investor Protection Act of 1970 (SIPA). The liquidation has been referred to and is now being administered under the auspices of The Honorable James M. Peck, United States Bankruptcy Court for the Southern District of New York (Case No. 08-01420 (JMP) SIPA). For more information, please visit www.lehmantrustee.com.
The information in this statement does not apply to any other Lehman entity, including separate insolvency proceedings involving Lehman Brothers Holding, Inc. (LBHI) and Lehman Brothers International (Europe) (LBIE).
SOURCE Office of the Trustee of Lehman Brothers Inc.
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