A Lehman Brothers’ lawsuit against Barclays Plc reconvened in U.S. Bankruptcy Court in New York this week, with the former head of Lehman’s restructuring group asserting that Barclays took unfair advantage of Lehman’s haywire financial position during its takeover in September 2008.
The September 16, 2008, asset purchase agreement estimating the value of Lehman’s holdings was wildly off base because of market turmoil, Mark Shapiro, the former head of Lehman’s restructuring group who is now head of the Barclays restructuring group, told the court, according to a report by Dow Jones Daily Bankruptcy Review.
The case, which was on a summer break of almost two months before this week, alleges that the British company Barclays put a “secret” discount price of $45 billion on the New York broker-dealer’s assets when they were really worth more than $50 billion.
In defending Barclays, attorney David Boies of Boies, Schiller & Flexner LLP asked Shapiro, Barclays’ first witness in the case, whether he thought Lehman could have found a better deal. “Shapiro said the firm couldn’t, as there were no alternative buyers and Lehman’s assets were plummeting quickly in value,” according to the Dow Jones report.