Well, then, I will begin at the beginning. Lehman Brothers filed for Bankruptcy.
Barclays Capital purchased some of Lehman's assets after Lehman filed for Bankruptcy. The purchase price is hard to pin down through a review of the Bankruptcy Court filings on Pacer. However, for the purpose of this post, it is enough to know that the purchase price was in the relatively "low" Billions of Dollars.
Barclays was required by Bankruptcy Law to meet the test of a purchaser 'in Good Faith' of assets of a debtor in Bankruptcy, in basic terms. For all purposes at the time of the purchase, at least, Barclays met that test and was a purchaser in Good Faith. Lehman apparently said so, then. So did a Federal Judge, apparently, in an Order approving the Sale.
The assets purchased by Barclays from Lehman either greatly increased in value, or they were worth a lot more money than the purchase price. For present purposes, say that their value was later found to increase from the "low" Billions to the high Billions of Dollars.
Lehman filed a Motion under Federal Rule of Civil Procedure 60 for Relief from that order or judgment as provided in that Rule. Lehman's Motion was filed in its original Bankruptcy Proceeding. At the time of this post, Pacer is having great difficulty accessing that pleading. It is Docket Number 5169 in the Southern District of New York's Bankruptcy Court Case Nos. 08-13555 and 08-01420, filed September 15, 2009.
Lehman contended in its Rule 60 Motion that, in effect, Barclays had acted in Bad Faith in the purchase of certain of Lehman's assets after Lehman filed the Bankruptcy Proceeding. Moreover, Lehman alleged in two Adversary Proceedings that Barclays allegedly aided and abetted Breaches of Fiduciary Obligations by Lehman executives: Download Lehman Brothers v. Barclays Capital Adversary Complaint (Bankr. S.D.N.Y. Case No. 09-01731, Filed November 16, 2009), Paragraphs 70-81, pp. 24-28; Download Trustee Lehman Bros. Bankruptcy Estate v. Barclays Capital Adversary Complaint (Bankr. S.D.N.Y. Case No. 09-01732, Filed November 16, 2009), Paragraphs 148-152, p. 31.
On Friday, January 29, 2010, Barclays Capital filed a 325-page Memorandum in Opposition to the Rule 60 Motions filed by Lehman and associated parties, and in Support of Barclays' affirmative Motion for Lehman to sell more assets and deliver them to Barclays: Download 012910.BarclaysMemorandum (Bankr. S.D.N.Y. Case Nos. 08-13555 & 08-01420). The documentation filed by Barclays has been described as "a 325-page filing". Michael J. de la Merced, "Barclays Seeks Dismissal of Lehman Estate Suit" p. B3, col. 1 (New York Times Nat'l ed., "Business Day" Section, Saturday, January 30, 2010). (At least, Barclays did not say it was a 'brief'.) However, Barclays filed more than 325 pages that Friday. The Memorandum itself is a pdf document of 325 pages, from cover to conclusion. In addition, on Friday, January 29, 2010 Barclays filed a Motion, a Declaration, and an Appendix to Memorandum.
In its lengthy Memorandum, in which there are 304 numbered pages of text, Barclays addressed the allegations of Bad Faith on pages 244-247 of the pdf document in particular, pages numbered 223-226 in the pleading, accessible here: Download 012910.BarclaysMemorandum (Bankr. S.D.N.Y. Case Nos. 08-13555 & 08-01420).
The voluminous documents and multiple contentions of the parties involved in Lehman's various Bankruptcy Proceedings illustrate the variety of contexts in which allegations of Bad Faith and Unfair Dealing make themselves known. See also Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" Ch. 2 (Second Edition Shepard's/McGraw-Hill; 2009 Supplement West Publishing Company).
Parenthetically, Bankruptcy Proceedings can be complex even for lawyers who do not regularly practice in the area. Bankruptcy must be very confusing indeed to non-lawyers.
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