Tuesday, 7 July 2015
Last updated 2 min ago
Jun 21 2010 | 12:53pm ET
The remnants of Lehman Brothers and its prime brokerage clients are heading back to court today to try to win those hedge funds a bigger stake of what’s left of the bankrupt investment bank’s pie.
Lehman and hedge fund CRC Credit Fund are to ask a London appeals court to overturn a lower-court ruling that prime brokerage clients whose funds weren’t properly segregated should be treated as unsecured creditors. The courts have already ruled that money that was properly segregated—some US$2.16 billion of it—can be returned, and Justice Michael Briggs rapped Lehman for its shoddy segregation practices, saying Lehman Brothers International Europe—home to the bank’s prime brokerage—failed to meet oversight requirements “on a truly spectacular scale.”
Hedge funds whose money was properly segregated when Lehman collapsed almost two years ago will continue to fight to ensure that their money remains just so. That group is headed by GLG Partners. The U.K. Financial Services Committee is also to be at the hearing.
The rest of the unsecured creditors, of course, oppose the Lehman-CRC bid. Arun Srivastava, a lawyer for those creditors, told Bloomberg News that the “cash available for the unsecured creditors will be depleted and may even be extinguished” if Lehman wins.
May 27 2015 | 2:15pm ET
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