Elliott, Goldman Spar Over Lehman Distributions

Jul 16 2012 | 11:45am ET

Elliott Management and Goldman Sachs have a difference of opinion over what should happen to what's left of Lehman Brothers' brokerage unit.

The hedge fund wants its $3 billion back—now. So it wants trustee James Giddens to liquidate everything he's got now and begin making cash distributions to customers.

Goldman doesn't think much of that plan. And in a U.S. Bankruptcy Court filing in Manhattan objecting to it, the bank said Elliott's proposal "is neither equitable nor fair"—nor legal.

The hedge fund "seeks to cast aside the mandates of [the Securities Investor Protection Act] in favor of a straight liquidation in which postpetition gains and losses will be apportioned among all customers, regardless of which securities they held or whether they are cash customers, securities customers or both."

Such a move "will benefit customers whose securities have declined in value since the petition date at the expense of customers who securities have appreciated during this time," Goldman continued.

Gidden has asked the court for approval to move $18.3 billion into a fund that would make interim distributions to customers. The trustee said he hopes eventually to return $23.7 billion, but that much remains tied up in litigation, including in the U.K.


In Depth

Fund Focus: Asian Frontier Capital Offers U.S. Investors Access To Untapped Markets

Mar 2 2015 | 6:47am ET

Hong-Kong based asset manager Asian Frontier Capital is making a capital raising...

Lifestyle

Hedge Fund Manager Out as Minnesota Wild Minority Owner

Feb 25 2015 | 2:45pm ET

New York hedge fund manager Philip Falcone is no longer a minority owner of the...

Guest Contributor

Risk Management: The Due Diligence Challenge And Branding Opportunity

Mar 2 2015 | 8:41am ET

The hedge fund firms that make it easier for prospective investors to gain comfort...

 

Editor's Note