Due to the speed by which Barclays PLC (NYSE:BCS) (LON:BARC) moved in 2008, the Second U.S. Circuit Court of Appeals acknowledged that “ambiguities and loose ends were inevitable.” However, documents related to the deal clearly showed that Barclays was entitled to the contested assets according to the ruling today.
Past payments to Barclays will not change
James W. Giddens, the trustee whom is winding down Lehman Brothers Holdings Inc Plan Trust (OTCMKTS:LEHMQ) has funds available in the event of today’s ruling and also said that payments already made to customers and creditors in the past won’t be affected.
“We are studying the decision closely,” Mr. Giddens said Tuesday in a statement. “Our focus remains on winding-down the estate, making distributions from the general estate as promptly as possible and protecting claimants’ interests and due process rights.”
Barclays PLC (NYSE:BCS) (LON:BARC) has yet to comment on the ruling as of this writing.
The once giant brokerage technically was not allowed to file for bankruptcy so following its collapse Sept. 15, 2008, a bankruptcy judge approved of a sale to Barclays which closed just a week later.
The last $3 billion
At issue between the two firms following the sale was $1.9 billion in securities and about $4 billion held to secure the brokerage’s exchange-traded derivatives.
Not included in today’s ruling is the dispute between Mr. Giddens and Barclays PLC (NYSE:BCS) (LON:BARC) over money in customer reserve accounts that was settled after the court declined to hear the case. That finished with a settlement of $769 million that Giddens paid Barclays.
Mr. Giddens, as of last week, had already distributed over $105 billion to roughly 111,000 former customers. According to the trustee, he still has over $3 billion to be distributed to creditors beginning in September but how much of that money that will be paid out remains a mystery.