The bankruptcy trustee winding down Lehman Brothers’ brokerage business on Monday said he would ask the U.S. Supreme Court to review a ruling that awarded billions of dollars in disputed assets to Barclays PLC, the Wall Street Journal reported today. Following Lehman’s 2008 bankruptcy filing, Barclays acquired Lehman’s brokerage business in a “no cash” transaction, Lehman says. A year later, a legal fight over the transaction ensued when Lehman sued Barclays, saying that the British bank negotiated a secret discount in the transaction. Judge James Peck, then Lehman’s bankruptcy judge, concluded that Barclays didn’t receive an improper “windfall” from the sale but wasn’t entitled to the so-called margin cash assets worth $4 billion. Later, however, a three-judge Court of Appeals panel said “ambiguities and loose ends were inevitable” in such a speedy sale and ruled that Barclays was entitled to these disputed assets. Lehman trustee James W. Giddens yesterday said that “while the bankruptcy Court rightly rejected Barclays’ claims to the margin cash assets, the decisions by the District and Appeals Courts reduced the amount available for the general estate by $4 billion, frustrated the purpose of the liquidation, and undermined the credibility of a sale hearing.”
