New Fight Over Lehman Prime Brokerage Assets

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.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.