Lehman Brothers Holdings Inc. (LEH)

Court Wants Barclays To Cough Up $2B In Lehman Assets
Jun. 8 2011 - 9:39 am | 1 views | 0 recommendations | 0 comments
Posted by Trefis Team

A  U.S. bankruptcy court is asking Barclays to fork over a disputed $2 billion in margin assets it obtained after its acquisition of Lehman Brothers in addition to 5% interest for holding these assets, which would raise the price tag another $270 million for the funds heading to the trustee liquidating Lehman’s brokerage business. [1] The actual impact on Barclays – assuming the ruling holds – will only be about $1.2 billion as a previous ruling allocated assets worth $1.1 billion to the company. The London-based global bank competes with other worldwide banking institutions and financial services group like Citigroup, RBS, Bank of America, UBS and JPMorgan Chase.

Our $18.30 price estimate for Barclays stock is roughly in line with market price.

Barclays had been luckier with the ruling on a bigger issue earlier…

The process of liquidation of Lehman’s assets has continued since the financial giant filed for Chapter 11 bankruptcy on September 15, 2008. Within a week, as a part of the flash sale of assets, Barclays paid $1.3 billion and acquired $47.4 billion in securities and assumed $45.5 billion in liabilities from Lehman. [2]

When the dust settled after the flash sale of its assets, the Lehman parent company demanded a whopping $11 billion as compensation for the “windfall” to Barclays from the newly acquired assets. Judge James Peck discarded these claims in a ruling in late February this year. [3]


… but not this time