A federal judge denied Lehman Brothers Inc.’s bid to carve out $1.3 billion from an earlier court decision that awarded $4 billion in disputed assets to Barclays PLC stemming from the U.K. bank’s purchase of Lehman’s brokerage business, the Wall Street Journal reported today. U.S. District Judge Katherine B. Forrest said on Wednesday that Barclays was entitled to all of the so-called margin assets — some billions of dollars in cash and collateral — securing derivatives positions. The ruling is a win for Barclays, which purchased Lehman’s brokerage business days after Lehman’s 2008 collapse. The legal fight over the sale began in 2009, when Lehman sued Barclays saying the British bank negotiated a secret discount when it bought Lehman’s brokerage. A bankruptcy judge concluded that Barclays didn’t receive an improper “windfall” from the sale, but that Lehman’s brokerage was entitled to the approximately $4 billion in margin assets. Both sides appealed, and the district court ruled that Barclays was entitled to both groups of assets. James W. Giddens, the trustee winding down Lehman’s brokerage, appealed to the Second U.S. Circuit Court of Appeals, which last year affirmed the district court ruling.
