Lehman Brothers Claims the Federal Home Loan Bank Owes the Firm $150 Million
Late last week, Lehman Brothers Holdings Inc. filed suit alleging the Federal Home Loan Bank of New York (FHLBNY) of cheating it out of more than $150 million by undervaluing numerous interest rate swaps that failed after the giant investment bank was forced into bankruptcy in September 2008. A lawsuit involved the FHLBNY’s termination of over three hundred swap and derivative transactions on September 18, 2008, three days after the company filed for Chapter 11 bankruptcy protection.
Lehman’s attorneys argued the FHLBNY was required, under terms of an agreement the fed had with the bank as well as the bankruptcy code, to determine the value of the swaps at the time they were terminated. Lehman alleges the swaps were “in the money” at the time of the terminations and therefore, FHLB owed Lehman substantial termination payments. During the bankruptcy proceedings, the FHLBNY filed numerous claims seeking tens of millions of dollars related to the swap terminations. Lehman’s attorneys argue those claims should be extinguished d because FHLBNY is the party responsible for making the termination proceeds payments.
The experienced securities fraud attorneys at Colling Gilbert Wright & Carter have filed and litigated numerous investor claims involving Lehman Brothers Holdings. If you believe, you have lost money due to an investment in Lehman Brothers, pleas contact us for free case evaluation.