Citigroup Says Lehman Brokerage’s $1.3 Billion Suit “Fails”

Citigroup Inc. asked a judge to dismiss most of a $1.3 billion suit brought by Lehman Brothers Holdings Inc.’s brokerage trustee, saying the trustee’s efforts to recoup most of the money “fail on multiple independent grounds” of the law.

Citigroup, the third largest U.S. bank by assets, lent Lehman’s brokerage more than $15 billion in the days after the Lehman parent went bankrupt in September 2008, according to a court filing yesterday. Trustee James Giddens demanded in a March lawsuit that Citigroup return more than $1.3 billion in cash and other assets that he said the bank seized or froze in violation of bankruptcy law, to trim its risk during the financial crisis.