Belfast Telegraph

Civil Service pension fund seeks compensation from bust bank

By David Elliot

A Northern Ireland civil servant pension fund is amongst a number of investors taking former bosses at Lehman Brothers to court for millions of pounds.

The former chief executive of the failed bank Richard Fuld and other senior executives have asked a judge in the US to release $90m (£55m) of insurance funds to settle the lawsuit which is being brought by funds which invested in the company including The Northern Ireland Local Government Officers Superannuation Committee (NILGOSC).

The fund runs the pension scheme for civil servants in Northern Ireland.

Reuters said that in papers filed on Wednesday in a bankruptcy court in Manhattan, Fuld and other current and former directors asked the judge to modify bankruptcy rules to allow them to use insurance policies to pay for a settlement of the case.

NILGOSC and other investors accused Lehman of selling them stock in the company at an overinflated price in 2006. They believe the company painted a "misleadingly rosy picture" of its financial health and want reimbursed for subsequent losses. It's not known how much Lehman stock NILGOSC had bought.

Lehman Brothers, at one time the world's fourth largest investment bank, became the poster child of the credit crunch when it filed for bankruptcy in 2008 with $639bn of assets (£390bn).

The judge has released funds nine times in the past to pay for similar settlements and any payout would come from insurance liability policies.

The settlement follows a number of other investigations into Lehman's collapse, Reuters said, but there have been no prosecutions of senior officials at the company.

Belfast Telegraph


From Belfast Telegraph