Barclays forced to pay out

BARCLAYS is being forced to return $2bn (£1.2bn) in margin collateral to the trustee for the brokerage arm of Lehman Brothers, the collapsed US bank.

US bankruptcy judge James Peck yesterday said the trustee, which is liquidating what is left of the brokerage business, is entitled to $4bn in margin assets that have been the subject of a long-running legal fight with Barclays.

The $2bn that Barclays must return was the amount of margin collateral in its possession at the time of that February ruling.

The other $2bn in margin assets is held by third parties or the trustee, according to Barclays.

In February, the judge ruled that Lehman’s sale of its North American business to Barclays at the height of the financial crisis was fair.

A Barclays spokesman said that the bank plans to appeal portions of the February decision.