Hedge Funds, P.E. Firms Interested In $1 Billion Lehman Claim

Sep 25 2009 | 12:35pm ET

Credit Suisse, which last month bought a Citadel Investment Group claim against bankrupt investment bank Lehman Brothers, is now trying to sell a $1 billion claim of its own.

The Swiss bank is trying to offload a claim tied to about 20,000 derivative contracts to which Lehman, which collapsed last year, was a counterparty, Bloomberg News reports. The claim was one of more than 16,000 filed against Lehman by a court-imposed deadline this week.

Credit Suisse is in talks with hedge funds and private equity firms about the $1 billion claim, Bloomberg reports. It comes as both trading in Lehman claims and the amount claimants are getting for them is steadily rising. Last week, Morgan Stanley sold a $1.3 billion claim for 38 cents on the dollar; Bloomberg reports than other Lehman claims are fetching about 40 cents on the dollar.

Credit Suisse bought a $423 million claim from Citadel in August as the Chicago hedge fund giant’s administration business was pursuing a mandate from Lehman’s administrators. Unlike Citadel, many hedge funds have been active buyers of Lehman claims, including Elliott Management, King Street Capital Management, Paulson & Co. and Silver Point Capital.

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