Friday, May 27, 2011

Citi fights to keep Lehman’s $1 billion

Reuters writes that Citigroup on Thursday sought to dismiss an effort by Lehman Brothers to recover $1 billion in collateral that the investment bank was forced to post when it was teetering on bankruptcy in the fall of 2008.

In a filing in U.S. Bankruptcy Court in New York, Citigroup said it was entitled to keep the $1 billion, which it obtained from Lehman in order to continue providing clearing services for foreign exchange transactions.

The trustee overseeing the liquidation of Lehman Brothers filed the claim against Citigroup and its subsidiaries last March, arguing that the $1 billion was obtained under coercion and that the amount should be part of a general asset pool to be divided among creditors in accordance with bankruptcy law. Citi countered that it is entitled to keep the $1 billion under the Bankruptcy Code's "safe harbor" provisions, which shield certain financial transactions from being included in the creditors' asset pool.

Don't stop now....read more at:
http://www.reuters.com/article/2011/05/26/us-lehman-idUSTRE74P8SB20110526

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