Lehman sues Barclays over windfall profit

Lawyers for Lehman Brothers Holdings Inc have filed a lawsuit against Barclays Capital to claw back billions of dollars of excess profit from last year's purchase of Lehman's US brokerage business, court documents showed.

The lawsuit followed claims by Lehman lawyers in September that BarCap, the investment bank arm of Barclays Plc, received an $8.2 billion "windfall profit" from excess assets it took control of in the fire sale of Lehman's US brokerage business in September 2008.

"The windfall to Barclays was not disclosed to the court, the Lehman Boards or Lehman's lawyers so as to allow the transfer to Barclays of billions of dollars in excess assets, without consideration, in a manner designed to avoid judicial, corporate and creditor oversight," Lehman said in a court filing on Monday.

A spokesman for BarCap in New York declined to comment. In the lawsuit, Lehman requested the court to order Barclays to "disgorge to Lehman any ill-gotten gains it obtained" and pay punitive damages.

Lehman's bankruptcy on September 15, 2008 was the largest US bankruptcy in history. Its flagship US brokerage business was sold to Barclays less than a week later in a hurriedly assembled deal.