Judge Won't Dismiss Lehman Brokerage's Claim Against RBS
(Updates with request to judge in second paragraph.)
Sept. 27 (Bloomberg) -- A bankruptcy judge refused to dismiss a $346 million claim by Lehman Brothers Holdings Inc.'s brokerage against Royal Bank of Scotland Group Plc, saying he would “retain jurisdiction to hear and determine all matters” arising from his order.
Royal Bank asked U.S. Bankruptcy Judge James Peck in Manhattan to dismiss the claim. Alternatively, it asked him to put on hold the brokerage's move to gather information to pursue its demand while Royal Bank waits for a district judge to decide whether to shift the case out of bankruptcy court. Peck rejected all of the bank's requests, according to an order filed in court yesterday.
ABN Amro, now owned by Royal Bank, owes the money, plus interest, to Lehman Brothers Inc. for early termination of a 1998 swap agreement, the brokerage said in a June filing in U.S. Bankruptcy Court in Manhattan. Royal Bank argued it has a right to set off the funds against amounts it's owed by the brokerage and its affiliates.
Pholida Phengsomphone, a spokeswoman in Connecticut for Edinburgh-based Royal Bank, declined to comment on the judge's order.
Lehman Brothers Inc., the remnants of the brokerage not bought by Barclays Plc, is being separately liquidated from its parent, Lehman Brothers Holdings Inc. It is seeking money from banks it did business with to pay its remaining customers.
The Lehman parent filed the largest bankruptcy in U.S. history on Sept. 15, 2008. The brokerage went into liquidation four days later.
The brokerage bankruptcy case is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
--Editors: Fred Strasser, Mary Romano
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