Lehman, Och-Ziff Battle Over Rumor E-Mails

Aug 13 2010 | 11:33am ET

What did Och-Ziff Capital Management know, and when did it know it? That’s what the Lehman Brothers estate wants to find out, but the New York-based hedge fund isn’t especially interested in helping.

The collapsed investment bank went to court this week asked a judge to force Och-Ziff to turn over e-mails that it claims show a rumor circulating that Lehman had improperly spun-off debt to hedge funds in an effort to mask its actual leverage. Lehman believes that the rumor, from the summer of 2008, helped grease the wheels of its demise.

Lehman is investigating the causes of its collapse, including whether hedge funds fomented or spread the rumor and then shorted its shares.

Lehman did not say whether it thought Och-Ziff played a part in the creation or spreading of the rumor, or whether it was merely a recipient.

Och-Ziff objected to the subpoena in June, arguing that it would cost the firm $3.3 million to fulfill the request.

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