Citigroup and the wreckage of Lehman Brothers Holdings Inc. have resolved a fight over $2.1 billion that dates to the financial crisis, while quietly burying a key question about derivatives-trading practices.
Bloomberg News reports that Citigroup agreed Friday that it will give back $1.74 billion to the estate of the failed New York-based investment bank. Citigroup had kept about $2.1 billion that Lehman had on deposit with it for trades on everything from interest rates to corporate and sovereign debt at the time of the 2008 bankruptcy.
That will be a boon for Lehman’s unsecured creditors in the 10-year-old bankruptcy case.
“We are pleased to have resolved this matter,” a Lehman spokeswoman said. In court papers, Lehman managing director Steven Mullaney said the pact is “reasonable in light of the complexities of the litigation” and the cost of fighting to the end.
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