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

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of