BofA Sues Lehman Over $509M In Setoffs

Law360, New York (December 1, 2008, 12:00 AM EST) -- Bank of America Corp. has sued Lehman Brothers Holdings Inc., arguing that more than $500 million in setoffs it made after the investment giant filed for bankruptcy were legal.

The lawsuit, filed Wednesday in the U.S. Bankruptcy Court for the Southern District of New York, concerns hundreds of millions in collateral posted by Bank of America when the sides entered into an agreement governing swap transactions.

In accordance with provisions in that 1996 agreement, Bank of America's complaint says, the amount payable by Lehman Brothers Special...
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