Lehman Brothers sues Citigroup for $2.5B

Friday, February 10, 2012

Lehman Brothers Holdings Inc. is suing several units of Citigroup Inc. to recover $2.5 billion it transferred to a backup account at Citi months before seeking bankruptcy court protection.

The failed investment bank filed the lawsuit on Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

Among other claims, Lehman says Citibank is wrongfully withholding the money as a potential source of funds in a dispute over derivative contracts.

In a statement Thursday, Citigroup called the lawsuit unjustified and accused Lehman of trying to renege on its obligations and claw back assets to which it has no right.

Lehman's bankruptcy filing in September 2008 was the biggest in U.S. history. Lehman Brothers Holdings is the company that controls what's left of the investment bank's assets.

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