Lehman sale to Barclays wins court approval

New York : Lehman Brothers Holdings Inc., the US investment bank that filed the largest bankruptcy in history, won federal court approval to sell its North American business to London-based Barclays Plc for $1.75 billion (Dh6.43 billion).

US Bankruptcy Judge James Peck in Manhattan overruled objections from Lehman creditors who said the sale was moving too quickly, setting the stage for Barclays, the UK's third-biggest bank, to close the deal over the weekend. Peck said it was clear no other purchaser would emerge if he delayed the sale, and that the deal would help stabilise global financial markets.

"I need to approve this transaction, because it's the only available transaction," Peck said. "Lehman Brothers became a victim, in effect the only true icon to fall in the tsunami that has befallen the credit markets, and it saddens me."

Deal of lifetime

Barclays President Robert Diamond called it the deal of a "lifetime" when the bank acquired Lehman's North American investment banking arm on September 17, two days after Lehman collapsed. Barclays may add other parts of the failed investment bank to help it boost equity and advisory units in Europe and Asia, Diamond told analysts at the time.

"This week, more than any other week, I have felt the awesome power of this job," Peck said. "This is the most momentous bankruptcy hearing I've ever sat through - either as a lawyer or a judge."

Lehman attorney Harvey Miller of Weil Gotshal & Manges said a rejection of the deal would have caused a "major shock to the financial system."