Judge: Bank of America Must Repay $500M Seized From Lehman Bros in 'Brazen' Action
Saying that he considered it “astonishing” that a major lender would act in such “brazen … unauthorized and impermissible” conduct, a federal judge yesterday ordered Bank of America Corp. to return $500 million, plus interest, that it seized from a cash collateral account after Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy.
Judge James Peck said the bank didn’t seek court permission, as required, for the post-bankruptcy-filing asset transfer in November 2008 and simply took the money with “apparent disregard for the consequences,” reports the Wall Street Journal (sub. req.). Lehman Brothers subsequently filed suit in an attempt to recoup the money.
Peck also said the parties should meet to determine “the amount of any further monetary award,” reports Reuters.
The case is being heard in federal bankruptcy court in Manhattan.
