Behind Credit Suisse's $1 Billion Lehman Fight, a Risky Trade
- Swiss bank is last to resolve Lehman derivatives litigation
- Lender is said to have sold most of its claim to hedge funds
A Credit Suisse logo sits on their offices in London.
Photographer: Simon Dawson/BloombergThis article is for subscribers only.
Three years into the bankruptcy of Lehman Brothers, Credit Suisse Group AG made a bold move.
It was around 2011 and most of its peers were settling claims that Lehman owed them billions of dollars from failed derivatives trades. Instead of joining in, Credit Suisse -- which had said Lehman owed it $1.2 billion from such trades -- decided to sell most of that claim to hedge funds, according to people with knowledge of the matter. The transaction, which requires Credit Suisse to pay back the hedge funds with interest if its claim isn’t allowed, gave the bank a slug of cash during a difficult period, while letting it to forge ahead with a legal battle for the full amount it said it was owed.