The trustee charged with winding down Lehman Brothers Holdings Inc.'s U.S. broker-dealer business Friday sued Citigroup Inc. seeking the return of some $1.3 billion the bank seized in the days following Lehman's Chapter 11 bankruptcy filing on Sept. 15, 2008.

Trustee James W. Giddens filed the suit in U.S. Bankruptcy Court in Manhattan. It alleges that Citi and several affiliates are refusing to return a $1 billion deposit Lehman's broker-dealer unit made the day its parent filed for bankruptcy.

The deposit was to ensure that Citi would continue to provide foreign-exchange settlement services to the unit.

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