Credit Suisse AG is closing in on an agreement to settle a $1.2 billion derivatives demand against bankrupt Lehman Brothers Holdings Inc., reducing the claim to $385 million, Bloomberg News reported. The settlement would end a 10-year fight over costs the Swiss lender said that it incurred to replace tens of thousands of derivatives trades it had entered with Lehman before its collapse in 2008. Lehman had accused Credit Suisse of inflating its claim by over $1 billion. The percentage Credit Suisse actually recovers on the claim would be complicated by the transactions, known as claim participation agreements. Each agreement was unique, and at least some were said to trade at 37 cents on the dollar. Credit Suisse is the last holdout among Lehman’s big derivatives counterparties that claimed the failed bank owed them money. Most of them settled long ago, and the only bank that took its case to trial, Citigroup Inc., ended up settling for a fraction of what it sought. A trial over Credit Suisse’s claim has been expected in the fall.
