The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (Trefis) -- Barclays' (BCS) legal battle with Lehman Holdings is not showing any signs of coming to an end, as the Securities and Exchange Commission is backing Lehman's claims over assets worth almost $3 billion and further complicating the situation.
Barclays and Lehman have been tied up in a series of lawsuits since Lehman's bankruptcy proceedings began in September 2008. The SEC voiced its opinion in favor of Lehman's claims to the assets, citing the interests of Lehman's customers. Lehman still needs about $5 billion to make up for the shortfall in its customer reserve accounts, and under these circumstances, the SEC opines that Barclays only has a conditional claim on less than half of the assets.
The London-based bank already has a lot on its plate, with the U.K. government ratifying the ICB's recommendations which will directly affect its business and that of competitors like RBS (RBS).We maintain a $33 price estimate for Barclays' stock and attribute the near 30% premium over the current market price to investor pessimism regarding banking stocks in light of economic conditions and the European debt situation. Lehman's long-drawn bankruptcy proceedings have been inching towards a possible reorganization, which was earlier slated for the fourth quarter but now would likely be implemented early next year. The legal battle between Barclays and Lehman resulted from Barclays' acquisition of a significant portion of the once fourth-largest investment bank in the U.S. Barclays' sizable profit from the deal was evident within months, and Lehman demanded a whopping $11 billion as compensation for the "windfall" as part of one court case, in addition to contesting Barclays' claims over margin assets worth $2 billion and reserve assets worth $1.3 billion.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV