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

Q&A: Filippo Pignatti Morano On The Ultimate Alternative Investment...Classic Cars

Jan 29 2015 | 12:37pm ET

In 2011, Filippo Pignatti Morano launched a fund to invest in classic cars. FINalternatives...

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

Five Tips For Successfully Marketing Your Hedge Fund

Jan 30 2015 | 9:14am ET

When it comes to the hedge fund industry, the notion of “build it and it will...

 

Editor's Note