Lehman, Citigroup settle US$2 billion financial crisis-era dispute

New York

CITIGROUP Inc and the wreckage of Lehman Brothers Holdings Inc have resolved a fight over US$2.1 billion that dates to the financial crisis, while quietly burying a key question about derivatives trading practices.

Citigroup agreed last Friday that it will give back US$1.74 billion to the estate of the failed New York-based investment bank. Citigroup had kept about US$2.1 billion that Lehman had on deposit with it for trades on everything from interest rates to corporate and sovereign debt at the time of the 2008 bankruptcy. That will be a boon for Lehman's unsecured creditors in the 10-year-old bankruptcy case.