Reply #33: The two are also fighting over derivatives

[Robbien]

Separately, Peck ordered yesterday that disputes among the collapsed investment bank and counterparties on derivative and swap contracts must go to mediation.

Lehman had more than 900,000 derivative contracts outstanding when it filed the largest U.S. bankruptcy a year ago. The New York-based bank said alternative dispute resolution, or ADR, will save money and time in resolving its complex Chapter 11 case over arguing each dispute in court.

Peck approved the request to require mediation at a hearing yesterday, turning aside objections from counterparties on the derivatives who said it would severely limit their rights and force them to provide too much information to Lehman and the committee representing its unsecured creditors.

The goal is “to get to an ADR process that encourages parties to write checks,” Peck said. “I think these procedures are quite appropriate.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=axX9PCd9qLd0


Interesting that Barclays is claiming that details of Lehman's derivatives should be kept secret from Lehman.