REFILE-Barclays bosses to take stand in Lehman row

(Refiles to include link to Breakingviews column)

* Barclays CEO Varley due to appear Tues, Diamond on Mon

* Lehman creditors claim UK bank gained windfall from deal

* Case shows frantic last days, need for “living wills”

LONDON/NEW YORK, June 21 (BestGrowthStock) – Barclays Plc’s (BARC.L: )
top two executives will this week tell a New York court the
British bank did not get an unfair windfall from a deal for
parts of Lehman Brothers in a case that shows the need for banks
to draw up “living wills”.

Barclays President Bob Diamond is due to appear on Monday,
followed a day later by Chief Executive John Varley. Lehman
Brothers [LEHMQ.PK] creditors charge them with taking advantage
of the investment bank’s collapse to get an $11 billion windfall
from its takeover of the U.S. operations. [ID:nN16151713]

Lehman creditors want the judge, who approved the
transaction 21 months ago, to review the sale.

Diamond, who heads the Barclays Capital investment bank arm,
had been due to appear in May, but his testimony was delayed
when other witness depositions took longer than expected.
[ID:nLDE6430SI]

Varley has run Barclays since 2004 and steered his bank
through the crisis without any need for state aid. The keen
angler and table tennis player, known for his precise language
and close attention to detail, was less involved in the
transaction and had not been expected to be called.

U.S.-based legal experts have said Lehman faces an uphill
battle in proving that Barclays arranged a secret discount and
persuading the judge to change the original sale order.

Barclays has said Lehman’s assets were inflated when the
deal was struck, and it marked them to their true value. It has
accused Lehman’s lawyers of trying to change the deal after
markets improved.

The deal has worked out well for BarCap, delivering bumper
profits as capital markets have improved and allowing it to grab
market share and add equities and advisory at a time when Wall
Street rivals were retreating.
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For a graphic Barclays timeline since June 2008, click on:
http://graphics.thomsonreuters.com/10/UK_BARC0610.gif
For a Breakingviews column see [ID:nLDE65K0HI]
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Lehman’s bankruptcy in September 2008 was the largest in
history, and less than a week later Barclays swooped for its
flagship U.S. brokerage business for about $1.85 billion.

The case has shown how frantic conditions were during
Lehman’s final days and is evidence of the need for banks to set
up so-called living wills to detail how they should be broken up
in the event of collapse, according to regulators and bankers.

Setting up resolution regimes should be one of the main
lessons of the financial crisis, the Institute of International
Finance said last month, so a bank can collapse in an orderly
way without threatening counterparties and spreading risk
through the financial system. [ID:nLDE64N16S]

Investment Basics

(Reporting by Steve Slater and Chelsea Emery; Editing by
Michael Shields))

REFILE-Barclays bosses to take stand in Lehman row