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

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...