Lehman sale to Barclays Upheld:On February 22, 2011, the United States Bankruptcy Court in New York City ruledthat Lehman ...
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Lehman Update

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Lehman Update

  1. 1. Lehman sale to Barclays Upheld:On February 22, 2011, the United States Bankruptcy Court in New York City ruledthat Lehman Brothers Holdings Inc.’s and Lehman Brothers Inc.’s Section 363 sale oftheir brokerage business to Barclays Capital Inc. days after Lehman’s Chapter 11filing on September 15, 2008 was proper. In a 103-page opinion, Judge Peck deniedLehman’s motion to modify the Section 363 Sale Order and ruled that the “saleprocess may have been imperfect, but it was still adequate under the exceptionalcircumstances” of the Lehman case. The Court noted that there was an “undeniablycorrect” perception that the sale “mitigated systemic risk” and avoided “an evengreater economic calamity.” This ruling, which will likely be appealed, will beviewed as a victory for the sanctity of Section 363 sale orders. With almost $11 billionof value at stake, the ruling will materially diminish the potential dividend tocreditors.David H. Conaway,Shumaker, Loop & Kendrick, LLP CHARLOTTE | COLUMBUS | SARASOTA | TAMPA | TOLEDO www.slk-law.com

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