Citigroup has urged a judge to dismiss an effort by Lehman Brothers to recover $1.3 billion in collateral, Bloomberg reports. The bank claims that its unit, Citibank, took the $1 billion deposit belonging to Lehman before it went into liquidation, so there was no violation of the automatic stay in bankruptcy law.
Lehman Brothers’ trustee filed the claim against Citigroup and its subsidiaries last March, saying that the money was obtained forcefully and that the amount should be part of a general asset pool to be divided among creditors in accordance with bankruptcy law. As per Citigroup, Lehman’s collapse led to $1.26 billion in unpaid expenses related to FX clearing.
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