Lehman Brothers Accuses Intel of Violating Swap Agreement

by San Antonio Attorney

Lehman sues Intel over alleged violations of a swap agreement back in August 2008, before the failed investment bank filed for bankruptcy. Intel gave $1 billion to one of Lehman’s derivatives unit to acquire 50.5 million shares of Intel, scheduled on Sept. 29, 2008, based on the filing made in a bankruptcy court in New York. To guarantee the deal, an additional $1 billion was put up by the Lehman derivative company as security against the stock.

The swap was intended to be concluded a few weeks later, with 50.5 million shares given to Intel and Lehman taking back its collateral. But on the agreed date, Intel took the collateral cash and stopped there.

It is exactly for an instance like this that the collateral was put in place, but at that time, Lehman was caught up in its $639 billion bankruptcy to handle the issue. However, Lehman is now accusing Intel of going too far in seizing the cash collateral. Lehman said the value of the shares of Intel common stock on at that time was only around $873 million, instead of $1 billion.

Intel took way over it was supposed to when it seized the cash collateral, Lehman argued.  On the other hand, Intel argued that the agreement stated that Lehman was to give Intel common stocks of $1 billion, which is why it believes the $1 billion cash collateral seized paid back the $1 billion it delivered over to the failed investment bank.

By now, only one thing is certain: Lehman wants to get money from Intel that will probably include damages and attorney fees as well. There is still no statement from Intel concerning the matter.

Lehman, which filed the largest bankruptcy in the history of United States, is in the midst of repaying $65 billion in debt

 

Business bankruptcy is one of the most complex areas of law. An experienced San Antonio Attorney can help your file for bankruptcy relief under the Bankruptcy Code.

Leave a Comment

Previous post:

Next post: