Bankruptcy Judge James Peck ruled yesterday that a group of more than 20 hedge funds and money managers can't jump ahead of creditors of Lehman Brothers Holdings Inc.'s brokerage arm in the order to be repaid, the Wall Street Journal reported yesterday. Judge Peck said that Lehman's "soft-dollar" arrangements with the money managers don't entitle them to customer status over the brokerage unit's creditors. Soft dollars are credits a brokerage gives to hedge funds and other money managers for using its services, typically for securities research. Because soft-dollar credits cannot be used like cash to buy securities, Judge Peck said, they do not qualify for enhanced customer protection under the law.
