Pickens, Hedge Funds Sue Lehman Commodity Services

Oct 7 2008 | 11:37pm ET

Legendary Texas oilman T. Boone Pickens and four of his hedge funds have sued a Lehman Brothers division for breach of contract.

Pickens and his BP Capital filed suit in New York State Supreme Court in Manhattan, alleging that Lehman Brothers Commodity Services broke a default agreement by failing to return collateral. Pickens and the hedge funds are seeking $59.9 million.

According to the complaint, Pickens—whose funds have lost about $1 billion this year while he leads a campaign for increased alternative energy use in the U.S.—and his firm sent termination letters to LBCS on Sept. 23, a week after Lehman filed for bankruptcy but before the commodity division filed itself. The suit is the second such action taken against LBCS, following a $500 million suit filed by Bank of America last month.

“The notices of termination specified Lehman Holdings’ bankruptcy filing as the relevant event of default,” the complaint alleges. “Defendant has failed to pay the amounts due.”

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