Citigroup Inc. said it may face demands by Lehman Brothers Holdings Inc. and its defunct brokerage for $3 billion in funds it took around the time of Lehman’s September 2008 bankruptcy filing.
The trustee liquidating the remnants of Lehman’s brokerage told Citigroup that he may try to recover $1 billion the bank took as a setoff against the brokerage’s obligations, Citigroup said in its annual report.
Lehman may sue for the return of a $2 billion deposit placed with Citibank in June 2008, New York- based Citigroup said in the Feb. 25 filing with the U.S. Securities and Exchange Commission.
Lehman, which unsuccessfully sued Barclays Plc over an alleged $11 billion “windfall” that the U.K. bank realized in buying the bulk of the brokerage, has sued banks including JPMorgan Chase & Co. demanding tens of billions of dollars. The lawsuits follow a report by a bankruptcy examiner, Anton Valukas, into Lehman’s collapse, the largest in U.S. history.
Lehman, once the fourth-largest investment bank, may have grounds to sue JPMorgan and Citigroup because they helped cause its failure by demanding more collateral and changing guarantee agreements, Valukas said in his report last March, filed in U.S. Bankruptcy Court in Manhattan.
Kimberly Macleod, a Lehman spokeswoman, didn’t immediately respond to an e-mail seeking comment. Jake Sargent, a spokesman for brokerage trustee James Giddens, had no immediate comment.
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