Pulsar Re Ltd v. Lehman Brothers Holding, Inc. Case No. 08-13555
Pulsar Re has filed a $450 Million suit against Lehman Brothers alleging the former investment company looted money it held for Pulsar in an effort to improve its books. The Adversary Suit filed in the U.S. Bankruptcy Court for the Southern District of New York seeks an order placing the $450 Million placed into a trust contending that the money is not part of the bankruptcy estate.
According to the complaint, Pulsar and Lehman reached an agreement whereby Lehman ceded approximately $1 Billion in reinsurance risk to Pulsar. Pulsar then pledged $450 Million to Lehman (in cash) to secure Pulsar’s reinsurance obligations. Lehman purportedly promised that the money would be held as cash and would not be converted into any other assets.
Subsequent to Lehman’s bankruptcy filings, Pulsar learned that Lehman misappropriated the money through a one-sided repurchase transaction backed by illiquid and materially overvalued assets. The suit alleges that the vast majority of the $718 Million taken out was in fact, Pulsar’s money.
For a copy of the complaint, click here
Brian Biggie and Sharon Angelino