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: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...

 

From the current issue of