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