Lehman Brothers Holdings Inc. filed a lawsuit on Dec. 23 against Saint Louis University, the counter party on five interest-rate swaps at the start of Lehman’s bankruptcy in 2008, Bloomberg News reported on Friday. According to Lehman, the university terminated the swaps early and paid Lehman about $25 million. Lehman contends the university calculated the termination payment in a commercially unreasonable manner and wants $17.5 million more. To calculate the termination payment, Lehman said the university solicited offers from nine swaps dealers to step into the bank’s shoes on the swaps. Lehman claims the bids SLU received were below market because the university made it clear the dealers wouldn’t be required to enter into actual swap agreements.
