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.
The settlement came 40 days into an epic trial in New York that began last April, and was shedding new light on the frenzied weekend before Lehman's bankruptcy filing on Sept 15, 2008. Lehman brought up phone recordings and messages from Citigroup traders, saying comments like "ringing the register, homey" showed how the bank tried to feast on Lehman's carcass. Citi…
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