Lehman Sues Barclays Over Assets

Lehman Brothers Holdings Inc. sued Barclays Capital Inc. Monday to recover billions of dollars of what Lehman says were excess assets improperly transferred to the British bank last year.

The lawsuit stems from Barclays' purchase last September of Lehman's broker-dealer business days after the investment bank filed for bankruptcy protection.

Lehman had previously claimed the deal was rigged to give Barclays a windfall profit that Lehman only learned about after the sale and which was never disclosed to the judge who approved the deal.

Lehman repeated those allegations in Monday's lawsuit filed with the U.S. Bankruptcy Court in Manhattan, claiming the sale was "secretly structured from the outset to give Barclays an immediate and enormous windfall profit."

The excess assets include up to $7 billion of securities transferred to Barclays under a repurchase agreement and nearly $5 billion in assets added to the deal after it won court approval.

Lehman is asking Judge James Peck to order Barclays to return the assets and award Lehman punitive damages.

A representative for Barclays could not immediately be reached for comment.