Lehman Trustee Settles With Citigroup: Report
NEW YORK (TheStreet) -- The trustee overseeing the unwinding of Lehman Brothers has reached an agreement with Citigroup (C) that would end a multiyear dispute over a $1 billion deposit, according to a published media report.
The two sides have been fighting over $1 billion that Lehman Brothers deposited at Citigroup the week that Lehman filed for bankruptcy protection during the height of the 2008 financial crisis, said the report, published on The Wall Street Journal's Web site.
The deal, which still must be approved by the bankruptcy court, gives Lehman Brothers' brokerage unit, LBI, a total of $435 million that it can distribute to customers and other creditors, said the report.
Of that total, $360 million will be in cash, while $75 million will come from Citigroup's forgoing of a claim that was paid contingently to Lehman Brothers' estate at the beginning of the company's liquidation, the report added, citing a statement from Lehman trustee James W. Giddens.
Lehman the deposit at Citigroup just days after Lehman's holding company collapsed in September 2008, the Journal report noted.
Citigroup had said it should keep the deposit to offset losses it said it suffered from continuing to clear Lehman's foreign-exchange trades after the holding company collapsed, the report said.
The court has set a hearing for Dec. 12 to approve the settlement, the report said.
"For the benefit of customers and other creditors, we continue to resolve disputes and marshal assets for the estate, and this agreement accomplishes both," said Lehman trustee James Giddens, according to the Journal.
"We are pleased to have reached an agreement with the Trustee," said a Citigroup representative, the Journal said.