Lehman Brothers Made 'Best Deal It Could' (BCS)

Lehman Brothers made “the best deal it could” when it sold its brokerage unit to Barclays BCS in “one of the most uncertain weeks in financial market history,” a former Lehman restructuring executive told a judge today. “Lehman was the largest broker-dealer to go bankrupt in history,” Mark Shapiro said. “The absence of a sale would have led to near-term liquidation and a piecemeal sale for much less.” According to a Bloomberg report, "Shapiro, now a Barclays restructuring executive, was today’s first witness in U.S. Bankruptcy Court in Manhattan as the London-based bank defended itself against Lehman’s claim that it should pay as much as $11 billion for an allegedly undisclosed “windfall” on the defunct brokerage. The deal, approved by U.S. Bankruptcy Judge James Peck, closed a week after Lehman’s Sept. 15, 2008, bankruptcy, the biggest in U.S. history." The Bloomberg report notes that "Shapiro told the judge that Lehman, in the days before the bankruptcy filing, focused on listing assets it “had to sell” as part of the brokerage business. Lehman fought with Barclays over the price for its New York headquarters building, boosting it to about $1 billion, and slashed a $250 million break-up fee demanded by Barclays in case the deal fell apart." Shares of Barclays lost 0.45% today, to close at $19.70.