More than 13 years after Lehman Brothers filed for bankruptcy, the fight for the last scraps of its carcass is still going on, Bloomberg News reported. Deutsche Bank AG is leading a last-ditch legal bid to squeeze more from a bet it made on obscure notes issued by Lehman in the years before the U.S. bank’s collapse. The German lender is appealing a decision made by a British court last year, hoping to gain more from its holding of “enhanced capital advantaged preferred securities” or ECAPS, a series of subordinated notes Lehman issued via one of its U.K. subsidiaries. The case started on Monday at the Court of Appeal in London, and the hearing is scheduled to last until the end of the week. A ruling in Deutsche Bank’s favor could see the payout on the ECAPS rise, boosting the returns of other holders, which, according to public documents and a person familiar with the matter, include Barclays Plc, Farallon Capital Management and CarVal Investors. If all goes well for the holders it’s possible they could receive a windfall of 500 million pounds ($678 million) on notes that were deemed worthless and given away for next to nothing in the aftermath of Lehman’s bankruptcy. That said, the case isn’t without its risks, and it’s possible that holders could be cut out of the money altogether. Another Lehman entity is also appealing, potentially diverting money away from ECAPS holders, according to separate court documents.
