Lehman Bros liquidators ask awkward questions - Barclays dives 25% on news - Market Cap now £5. 5 Bn.
This Forbes / Reuters / FT report seemed to spook the market as it opened, Liquidators quiz Barclays over Lehman funds-FT .....
Liquidators for Lehman Brothers, Alvarez and Marsal asked Barclays in a letter of February 19th , to account for funds it received as part of its purchase of the failed investment bank's North American unit, the Financial Times reported on Thursday (today) Barclays questioned on funds.
Citing sources close to the situation, the newspaper said U.S. liquidators Alvarez and Marsal were seeking clarification on the fate of US$4.2 billion transferred to Barclays to cover Lehman's bonus and severance payments and other liabilities.
The liquidators calculate only US$900 million has been spent, the newspaper said.
Barclays booked a gain of £2.3bn ($3.3bn) in it's Annual accounts pulished last week, on the difference between the fair value of the assets and liabilities acquired from Lehman and the price paid for them. The gain accounted for about a third of Barclays' pre-tax profits and helped Barclays Capital, its investment banking arm, to record a profit of £1.3bn.
Lehman Brothers Holdings, the bank's remaining businesses, now managed by Alvarez & Marsal, said it was "not making any allegations but is simply requesting factual information from Barclays as to certain discrepancies". Ho Ho. Ho ... but the liquidator wants his money back please.
The Daily Torygraph report Friday that "Sandy Chen, of Panmure Gordon, in a report on Barclays' monoline and structured credit exposures says : "If corporate defaults jump and structured credits undergo another wave of downgrades, we think that the structure of swaps with monolines and other counterparties that Barclays put in place to limit losses could buckle – leading to further impairments and/or writedowns."