The Work

April 29, 2010 5:09 PM

Harvey Miller, Lehman's Main Lawyer, Helping Barclays?

Posted by Zach Lowe

Harvey Miller, the lead bankruptcy attorney for the Lehman Brothers estate, took the witness stand Wednesday in the dispute between the estate and Barclays over whether Barclays wrongfully received an $11 billion windfall when it bought Lehman's North American operations, according to our colleagues at The Am Law Litigation Daily

This moment was long in the making. Barclays moved to depose Miller and several of his Weil, Gotshal & Manges colleagues after the Lehman estate filed papers asking Judge James Peck to overturn the sale order struck just days after Lehman's September 2008 bankruptcy filing. Barclays' goal in deposing Miller? To prove there was no windfall, that any profit Barclays has earned on billions in securities it acquired in the deal was the unpredictable result of good business and market fluctuations, not the product of any conspiracy. 

That's essentially what Miller said during his deposition, and it appears he echoed that earlier testimony during his day on the stand Wednesday in Peck's courtroom, the Lit Daily reports. Miller testified that the Lehman-Barclays sale was never intended to be a wash in which the two sides would basically break even. The banks weren't haggling over the value of each security included in a huge pile of securities, valued at about $49.7 billion, acquired by Barclays in the deal. The value of those securities was in constant flux as the economy collapsed around Lehman, and the dealmakers were focused instead on striking a quick deal to preserve Lehman's remains, Miller testified. "This was the most hectic and difficult transaction I've ever been involved with," Miller testified, per the Lit Daily. "We saved a business that would have put 10,000 people out of work if it hadn't been sold. It would have been pandemonium. I'm very proud of what happened."

Miller was testifying under cross-examination from Jonathan Schiller of Boies, Schiller & Flexner, the lead lawyer for Barclays. Jones Day partner Robert Gaffey is representing the Lehman estate. Gaffey used his time to try and prove Miller and other Weil lawyers were uninformed about the particulars of the deal talks, the Lit Daily says. The estate is arguing that a few high-level executives on both sides secretly structured the deal to benefit Barclays. 

Under the terms of the deal, Barclays paid $1.5 billion for Lehman's North American operations and $45 billion in cash in return for that pile of securities mentioned above. 

As the Lit Daily noted, Judge Peck thinks highly of Miller. "There's no one I can think of with better expertise in the subject matter," Peck said in court Wednesday. Does that bode well for Barclays? Stay tuned.

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