Citi to pay $360 million to end $1 billion Lehman collateral dispute
November 19, 2012 2:49 PM EST
According to a settlement reached on Friday with the trustee liquidating Lehman Brothers's U.S. brokerage unit, Citigroup will also relinquish its claim to $75 million that was contingently paid to the estate at the beginning of the liquidation, court documents showed.
The trustee, James Giddens, filed the claim against Citigroup and its subsidiaries early last year, arguing that the $1 billion was obtained under coercion and that the amount should be part of a general asset pool to be divided among creditors in accordance with bankruptcy law.
Citigroup had countered the trustee's claims saying that it is entitled to keep the $1 billion under the Bankruptcy Code's "safe harbor" provisions, which shield certain financial transactions from being included in the creditors' asset pool.
"For the benefit of customers and other creditors, we continue to resolve disputes and marshal assets for the estate, and this agreement accomplishes both," Giddens said in a statement.
In a New York court filing, Giddens said that the protracted litigation over the collateral dispute, along with associated legal costs, would not be in the best interests of the Lehman estate. Lehman's agreement with Citigroup is subject to court approval.
Lehman emerged from bankruptcy in March, and has paid out or plans to pay out $33 billion of an expected $65 billion to creditors, recovering an average of 21 cents on the dollar. The company is also being wound down.
In October, the U.S. brokerage unit and a European unit of the former Lehman Brothers Holdings Inc said they settled litigation over $38 billion of asset claims, a major step toward customers and creditors recovering money.
(Reporting by Sakthi Prasad; Editing by Muralikumar Anantharaman)
Most Popular Slideshows
- Taylor Swift Named People's Best Dressed Stars Of 2014 [PHOTOS]
- Champions League Results: Barcelona Barely Escapes With A Win, Chelsea Fails To Hold On To The Lead [PHOTOS]
- Jeremy Lin, Kobe Bryant Among The Top 5 Overpaid Players In The NBA (Part 1 - Western Conference)
- Reasons Why Michael Jordan Is Better Than LeBron James [PHOTOS And VIDEO]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Google Release Roundup: New Nexus 6, Nexus 8, Android 5.0 L Launch and Killer Features
- Xperia Z, Xperia ZL, Xperia ZR Android 4.4.4 KitKat Update Guide
- 'ISIL Has To Be Defeated, Plain And Simple, End Of Story,' Sen. John Kerry
- New Samsung Galaxy S5 Android 4.4.4 KitKat Update Released, Verizon Guide and Installation