Bank of America $590 Million Lehman Order 'Not Final'

Bank of America $590 Million Lehman Order 'Not Final'

Jan. 7 (Bloomberg) -- Barclays Plc said disputes over an $11 billion profit it allegedly made buying bankrupt Lehman Brothers Holdings Inc.’s brokerage may not all be resolved in a current trial and might need “further adjudication.”

Barclays is awaiting a verdict from a U.S. bankruptcy judge on whether it owes money to Lehman or the brokerage trustee, or whether it will get the $3 billion it says it’s owed. The assets were at issue in more than 30 days of court testimony at a nonjury trial that ended in October.

The conflict that may not be resolved is over $769 million in securities held in the Lehman brokerage’s customer reserve accounts, which London-based Barclays is claiming and the trustee is holding onto, Barclays said in a filing yesterday in U.S. Bankruptcy Court in Manhattan. The U.S. Securities and Exchange Commission said last month that a transfer of the funds might violate U.S. law.

The U.K. bank, New York-based Lehman and the trustee all agree that certain evidence on this issue need not be introduced in court, according to the Barclays filing. U.S. Bankruptcy Judge James Peck approved the agreement yesterday, according to the filing.

Kimberly Macleod, a Lehman spokeswoman, said she couldn’t immediately comment. Jeff Zelkowitz, a spokesman for trustee James Giddens, declined to comment.

Barclays was the sole bidder for the brokerage in September 2008 after Lehman filed the biggest bankruptcy in U.S. history.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--With assistance from Bill Rochelle in New York. Editors: Andrew Dunn, Fred Strasser

To contact the reporters on this story: Linda Sandler in New York at lsandler@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.