Litigation with big banks has been something of a mixed bag for court-appointed Lehman Brothers liquidation trustee James Giddens. The Hughes Hubbard & Reed partner negotiated an $861 million settlement with JPMorgan Chase in April 2011 over disputed assets that JPMorgan held as one of Lehman’s clearing banks. His counsel at Hughes Hubbard then won a ruling worth $4.8 billion in a battle over Barclays’ acquisition of Lehman’s broker-dealer unit, but in June a judge sided with Barclays’ lawyers at Boies, Schiller & Flexner and overturned the decision.
On Nov. 16 it was Citigroup and Gidden’s turn to announce some good news. In a motion filed in U.S. Bankruptcy Court in Manhattan, the trustee said that Citi had agreed to a $435 million deal to resolve claims that Citi unlawfully seized Lehman deposits as Lehman was imploding in 2008. The proposed settlement requires Citi to pay $360 million to the Lehman estate and to forfeit its claim to a $75 million contingency payment made at the start of the liquidation process. Southern District Bankruptcy Judge James Peck must approve the deal.
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