Bankruptcy judge rejects disgraced Lehman’s €2bn bonus bid
Published 15/09/2011 | 08:46
A US judge has denied a request from the administrators of disgraced banking giant Lehman Brothers to recoup $500m from Barclays.
Lehman – the collapse of which triggered the current recession – says Barclays agreed to pay $2bn in bonuses to its staff when it acquired the bank's US brokerage business in 2008, but only paid $1.5 billion. Lehman was looking to recover the remaining $500m.
Barclays countered that while it may have had some obligation to the employees in question, those workers have not made any claims,
It also said it never formally agreed to the $2bn payout.
"The court sides with Barclays," Judge James Peck wrote in his ruling filed in US Bankruptcy Court.
"The Lehman motion is baseless."
The judge called the figure "an approximation, a rough, good faith estimate of the total compensation amounts that were to be assumed by Barclays."
Lehman collapsed in September 2008 in the largest bankruptcy in US history, setting off a financial shockwaves.
The investment bank had $639bn in assets on September, 2008, when it filed for bankruptcy.
Less than a week later, Barclays bought Lehman's US brokerage business for $1.54bn and assumed its debt pile of $4.2bn.