Lehman entitled to disputed collateral, judge says

NEW YORK (Reuters) – The trustee for Lehman Brothers Holdings Inc’s U.S. brokerage is entitled to $4 billion of disputed margin collateral assets in its legal fight with Barclays Plc , a bankruptcy judge ruled on Monday.

U.S. Judge James Peck issued the ruling from the bench at a court hearing in Lehman’s long-running dispute with Barclays, which bought much of Lehman’s U.S. operations at the height of the financial crisis in September 2008.

In February, the judge ruled that Lehman’s hurried sale to Barclays was fair, but he also said that Barclays was not entitled to roughly $4 billion in margin collateral that Lehman had posted to cover outstanding derivatives trades.

A Barclays spokesman, Michael O’Looney, said after Monday’s court hearing that the bank plans to appeal the judge’s February ruling.

(Reporting by Jeff Roberts; Writing by Martha Graybow; Editing by Steve Orlofsky)