Almost five years after Lehman Brothers Holdings filed for bankruptcy and set off the global financial crisis, managers of the bank’s estate are demanding millions of dollars from retirement homes, colleges and hospitals.
Bloomberg reports that after selling most of its assets, Lehman now says it was shortchanged by scores of nonprofits that were forced to pay to exit derivatives that were unwound after the firm filed for Chapter 11 protection.
The Buck Institute for Research on Aging in Novato,California, gave Lehman $2m in October 2008 to cancel a swap contract used to manage fluctuating interest rates. Lehman says it wants $12.1m more and has assessed at least an additional $4.7m in interest, the research center said in its most recent financial statement. The amount Lehman is seeking is more than half of what Buck spent last year researching Alzheimer’s, Parkinson’s and other diseases.
'Lehman is sort of a zombie-like bankruptcy entity: Instead of looking for brains, it’s looking for cash', said Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll LLP in Louisville, Kentucky.
'Lehman doesn’t care. They have a duty to maximize their return to their bankruptcy creditors. If you’re Mother Theresa, they’ll go after you', he said.
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