City firms line up for latest bout of Lehman litigation

Leading City firms appeared in the Court of Appeal today to try to recover funds for their clients in a long-running dispute relating to the collapse of investment bank Lehman Brothers.

Allen & Overy (A&O), Field Fisher Waterhouse, Linklaters, Norton Rose and Simmons & Simmons are all involved in the billion-dollar battle over the estate of the investment bank’s European arm, Lehman Brothers International Europe (LBIE).

The dispute centres around various clients and affiliates and their attempts to access LBIE’s client money pool. On 15 December 2009 Mr Justice Briggs ruled at the High Court that LBIE clients whose money should have been segregated when the company went in the administration but was not did not have access to the client money pool.

CRC Credit Fund is the representative of the third-party, non-segregated client group and is represented by Simmons & Simmons partner Robert Turner.

They are arguing that they should be given access to the client pool, as are affiliates Lehman Brothers Inc (LBI) and Lehman Brothers Finance (LBF). LBI is represented by Norton Rose partner Hamish Anderson and LBF is represented by Field Fisher Waterhouse partner Duncan Black.

GLG Investments, represented by A&O partner Jennifer Marshall, will argue that the client pool should only be accessed by those clients whose money was segregated.

Baker & McKenzie partner Arun Srivastava is acting for Hong Leong Bank Berhad, which opposes calls for the client money pool to be topped up from the Lehman general estate.

The FSA’s recent tough stance against banks that do not separate client money, culminating in JPMorgan being fined £33.32m by the FSA, made headlines earlier this month. The FSA will also be represented at the hearing.

LBIE is being advised by Linklaters partner Stephen Fletcher.