Lehman to appeal order validating Barclays sale

Lehman said Barclays got a sweetheart deal in acquiring its U.S. investment banking and brokerage operations.

Lehman Brothers Holdings Inc LEHMQ.PK will appeal a court order upholding the rushed sale of its North American business to Barclays PLC BARC.L nearly three years ago,a deal Lehman said afforded Barclays an 11 billion 6.7 billion pounds 8220;windfall.8221;

In court papers filed late Thursday in U.S. Bankruptcy Court in Manhattan,Lehman said it will appeal to Manhattan federal court the February ruling from Judge James Peck,who presides over Lehman8217;s bankruptcy.

Lehman was expected to appeal the matter,aspects of which have already been appealed by Barclays and by the trustee liquidating Lehman8217;s brokerage.

Lehman8217;s creditors8217; committee also filed an appeal notice Thursday,saying it would seek review of a related order rejecting the committee8217;s objections to the Barclays deal.

A Lehman spokeswoman declined to comment. A Barclays spokeswoman said the company did not have a statement.

Lehman said Barclays got a sweetheart deal in acquiring its U.S. investment banking and brokerage operations in the days following its filing of the biggest bankruptcy in U.S. history. It said Barclays failed to make key disclosures in the 1.85 billion deal,resulting in a windfall of about 11 billion.

Peck called the sale process 8220;imperfect,8221; but said any disclosure lapses were not serious enough to affect the fairness or outcome of the sale.

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James Giddens,the bankruptcy trustee for Lehman8217;s brokerage,a week ago appealed a separate aspect of Peck8217;s ruling entitling Barclays to 1.1 billion in money held to facilitate the clearance of securities trading.

A week before that,Barclays appealed still another element of the ruling handing the trustee 4 billion in so-called margin assets,collateral Lehman posted to cover outstanding derivatives trades.

Lehman declared bankruptcy on September 15,2008,listing 639 billion in assets,six times more than any other bankrupt U.S. company. The filing was a major factor in the financial crisis.

It is scheduled to ask Peck on August 30 for authority to hold a creditor vote on a roughly 65 billion payout plan to exit bankruptcy.

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The case is In re Lehman Brothers Holdings Inc,U.S. Bankruptcy Court,Southern District of New York,No. 08-13555.