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BARC Barclays Plc

183.20
1.68 (0.93%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Barclays Plc LSE:BARC London Ordinary Share GB0031348658 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  1.68 0.93% 183.20 183.48 183.52 185.68 182.82 183.32 54,857,915 16:35:20
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Commercial Banks, Nec 25.38B 5.26B 0.3470 5.29 27.81B

Ex-Lehman Trader Continues Fight for $84.8 Million Bonus

26/01/2015 7:10pm

Dow Jones News


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By Joseph Checkler 

A former Lehman Brothers trader is still fighting for bonus money he says is owed him from 2008.

In a filing with U.S. Bankruptcy Court in Manhattan, Jonathan Hoffman, a global rates trader, denies an assertion by the trustee unwinding Lehman's brokerage that he was "fully paid" $84.8 million in bonus money he was owed. Mr. Hoffman, who at the time of Lehman's collapse was the bank's third-highest paid rank-and-file employee, also denies Lehman's assertion that he is asking to be paid twice for the bonus. Mr. Hoffman says his bonus package with Lehman was separate from the one he negotiated with Barclays PLC (BCS) after Barclays bought the brokerage. Barclays paid Mr. Hoffman a bonus as part of his compensation.

"Hoffman's agreement with Barclays compensates him for work he performed for Barclays after he was terminated by LBI," Mr. Hoffman's lawyers said in a filing. "The Barclays contract does not state that Barclays was compensating or intended to compensate Hoffman for his past work with LBI." LBI refers to Lehman Brothers Inc., the name of Lehman's brokerage business.

Mr. Hoffman hasn't denied that Barclays paid him some bonus money for 2008. But he has said he negotiated his contract with Barclays separate from the acquisition, and that money paid by Barclays had nothing to do with his Lehman contract.

He says when he left the bank, he was owed $76.3 million bonus for 2008 and another $7.7 million for the second installment of his 2007 bonus.

"Barclays did not pay him $76 million, or anything close to that, for work relating to 2008," Douglas Baumstein, a lawyer for Mr. Hoffman, said in a statement emailed to The Wall Street Journal in December. "Mr. Hoffman was paid pursuant to his Barclays' contract, not pursuant to his Lehman contract."

The fight with the Lehman trustee, James W. Giddens, is expected to come in front of Lehman's bankruptcy judge on April 22. Mr. Hoffman had wanted the matter to be argued in January, but Mr. Giddens had objected to such a short timetable.

In a filing in December, Mr. Giddens's lawyers said, "The trustee expects that the evidence will show that the amount Barclays paid to Mr. Hoffman related to his work at [Lehman]."

Even if the claim were accepted, it would likely be paid at less than the full amount, since only customers of the brokerage received all they are owed. Mr. Hoffman would be considered a general unsecured creditor.

When asked about Mr. Hoffman's employment, a Barclays official had testified in court in 2010 that Barclays "issued him with a similar contract" as his agreement with Lehman.

The Barclays' official added that the bank typically matched Lehman bonuses "as part of the acquisition."

Mr. Giddens's objection to the bonus comes as he tries to sort out other squabbles with former Lehman employees. The trustee's lawyer said in December he hopes to reach settlements on most of the disputes.

The parent company of Lehman's brokerage emerged from bankruptcy in March 2012, and it remains a business with a board and billions of dollars in assets. As Lehman sells assets or settles claims, the pool of money that can be returned to its creditors grows. That number is now more than $90 billion.

Separate from Lehman Brothers Holdings Inc.'s Chapter 11 case, the brokerage is technically not in bankruptcy but is being unwound separately by Mr. Giddens under the provisions of the Securities Investor Protection Act.

Mr. Giddens has already paid back about $110 billion to creditors, including about $107 billion to those with "customer" status and more than $3 billion to general creditors of the brokerage.

Write to Joseph Checkler at joseph.checkler@wsj.com

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