Barclays sees off $11bn Lehman lawsuit

23rd Feb 2011 11:34

A New York judge has thrown out an attempt to sue Barclays for $11bn (£6.8bn) over the way it bought Lehman Brothers at the height of the credit crunch.Lawyers overseeing the Lehman bankruptcy estate accused the British bank of taking advantage of the chaos sparked by the financial crisis to snap up the American firm's US operations on the cheap.Barclays paid $1.85bn for the US investment banking and broking arm just five days after Lehman had filed for Chapter 11 bankruptcy protection. Judge James Peck called the sale process during September 2008 "imperfect, but still adequate under the exceptional circumstances".Many experts believed the acquisition was essential to maintain some kind of order in the financial markets, but the Lehman estate believes the bank's assets were undervalued in order to seal a deal with Barclays on the chance of a job with the UK lender."The court does not believe that any Lehman employees breached their duties of loyalty to the estate because of the prospect of future employment or as a consequence of signing lucrative employment contracts with Barclays," Judge Peck said. "That aspect of the movants' case is built on a faint aroma of venality and conflicted loyalty, but no breach of duty or other misconduct was demonstrated."