Lehman Sued Over $450 Million Bermuda Repo ‘Abuse’
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Lehman Brothers Holdings Inc. was sued for an “abuse” of repurchase agreements that effectively “looted” $450 million from a Bermuda reinsurance unit when the assets were pledged to the unit’s biggest lender.
Lehman took the cash in 2008 when it was increasingly short of funds, said Pulsar Re Ltd., a Bermuda-based reinsurance company that is claiming the money from defunct Lehman Re in Bermuda, in a lawsuit. Lehman saddled the unit with illiquid assets “worth far less than the inflated market values assigned to them by Lehman personnel,” Pulsar said in the complaint filed yesterday in U.S. Bankruptcy Court in New York.