The Jones Day team, led by partner Robert Gaffey, is seeking discovery on apparent discrepancies related to the liabilities assumed by Barclays in the rushed September sale of Lehman’s brokerage, which took place almost immediately after Lehman filed for bankruptcy. “I know from having sat there that week it was an extraordinary time in the world of global finance,” Peck said, according to Bloomberg. “It’s conceivable that mistakes were made.”
Barclays’s lawyer, Hamish Hume of Boies, Schiller & Flexner, told Judge Peck that the requested discovery was “exceptionally broad and hugely intrusive,” Bloomberg reports. Barclays had previously argued that it already provided documents in the probe, which it considers “meritless.”
Hume referred our call for comment to Barclays, which e-mailed us a statement. “We fully intend to abide by the court’s ruling and continue to cooperate with [Lehman], and at the conclusion of the enquiry we do not expect any claims to be brought against Barclays,” it said. Gaffey didn’t return our call.
Lawyers who are watching the case say Jones Day will have a tough time recouping any money for Lehman, given that Lehman pushed for court approval of the sale in September, and bankruptcy court sale orders are considered sacrosanct. For Lehman to get anything, they say, Jones Day will have to show that Barclays did not negotiate in good faith, essentially committing a fraud on the court.
Jones Day will also have to coordinate Lehman’s investigation of Barclays with creditors committee counsel from Quinn Emanuel Urquhart Oliver & Hedges, the court-appointed examiner’s counsel from Jenner & Block, and the Securities Investor Protection Corporation, according to Bloomberg’s report.