Lehman International, Citigroup ink deal on $2.5 billion of assets

By Caroline Salls

Pittsburgh, June 29 - Lehman Brothers International (Europe)'s administrators have reached a settlement on more than $2.5 billion of assets, which had been held for the company by administrator Citigroup's custody businesses in a number of countries, according to a news release.

Under the settlement, Citigroup will immediately begin the process of transferring Lehman Brothers International (Europe)'s custody assets, and the company will pay Citigroup custodian fees to reflect the complexity of the Lehman estate and the custody positions.

Both parties will release each other from all other claims or liabilities.

"This is a landmark deal, which the team has worked extremely hard to achieve over many months," administrator PricewaterhouseCoopers restructuring partner Paul Copley said in the release.

"This is by far the largest single deal we have undertaken and easily the most complex to negotiate and then structure, given the sheer scale of the legacy relationship between Citigroup and LBIE.

"This is a major step forward for the LBIE estate," he added.

Before Lehman Brothers International (Europe) entered administration, the company and Citigroup, acting on its own behalf and as agent for third parties, had entered into a large volume of complex and vanilla OTC derivatives, stock lending, repo transactions and prime brokerage and trading arrangements, the release said.

Under a separate arrangement, Citigroup had also acted as a custodian for Lehman Brothers International in a number of countries.

The administrator said it has been holding the company's custody assets while it assessed its exposure to Lehman Brothers International (Europe) and to Lehman entities across the globe.

Citigroup and Lehman Brothers International have taken steps to return client assets held in custody during the course of the administration, according to the release.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 08-13555.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.