(Adds details on court action, reaction, paragraphs 3-10)
By Lawrence Hurley
WASHINGTON, May 4 (Reuters) - The U.S. Supreme Court onMonday allowed Barclays Plc to claim about $4 billion ofdisputed assets as part of its hurried purchase of much ofLehman Brothers Holdings Inc's brokerage unit at theheight of the 2008 financial crisis.
The U.S. top court declined to hear an appeal filed byLehman's creditors, leaving intact an August 2014 ruling by the2nd U.S. Circuit Court of Appeals in New York that went in favorof Barclays.
Barclays already had control of $3.5 billion of the disputed$4 billion.
Trustee James Giddens has been seeking to recoup money forthe brokerage's creditors, including Lehman affiliates and hedgefunds. Lehman had been Wall Street's fourth-largest investmentbank. It had $639 billion of assets when it filed for Chapter 11protection on Sept. 15, 2008, making its bankruptcy by far thebiggest in U.S. history.
Barclays won court approval to buy much of Lehman'sbrokerage business at a Sept. 19, 2008, hearing overseen by U.S.Bankruptcy Judge James Peck in Manhattan.
A dispute remained, however, over how to dispose of various"cash" assets of the brokerage. These included the $4 billion ofmargin assets held by third parties to support a Lehmanexchange-traded derivatives business.
Also in dispute was $1.9 billion of "clearance box" assetsused to process securities trades, although that was not part ofthe Supreme Court appeal.
In February 2011, Peck said Barclays was entitled to theclearance box assets but not the margin assets. But in July2012, U.S. District Judge Katherine Forrest in Manhattanpartially reversed him, and said Barclays deserved both. Theappeals court upheld that decision.
"We are disappointed but remain focused on continuedprogress in winding-down and closing out" the Lehman Brothersestate, said Kent Jarrell, a spokesman for Giddens. "The trusteeappropriately reserved for the Barclays litigation, so thedecision does not impact distributions already completed orassets on hand for potential additional distributions tounsecured general creditors."
The case is Giddens v. Barclays, U.S. Supreme Court, No.14-710. (Reporting by Lawrence Hurley; Editing by Will Dunham)
Barclays (BARC)
