Barclays/Lehman deal FUBAR

Ten artykul naprawde potrafi otworzyc oczy na burdel w transakcjach miedzy
bankowych. FUBAR jest okresleniem ktore powstalo w armii amerykanskiej w
czasie wojny w Europie. Oznacza po prostu fucked up beyond all recognition.
Transakcja zakupu czesci aktywow z Lehmana zostala skopana dokumentnie przez
edycje dokumentu sadowego - a wlasciwie z powodu konwersji pliku Excel na PDF
w wyniku ktorego pojawily sie wczesniej ukryte wiersze z transakcjami, ktorych
Barclays nie zamierzal przejmowac. Innymi slowy, przez pomylke, Barclays
przejal na siebie zobowiazania wynikajace ze 179 kontraktow, ktorych szczegoly
nie sa znane. Obecnie Barclays walczy o anexowanie umowy w celu wyeliminowania
tych zobowiazan. Cyrk.



www.theregister.co.uk/2008/1015/lehman_buyout_excel_confusion/
Lehman Excel snafu could cost Barclays dear
Hey, whoa, we never meant to buy that bit
By John Leyden

Posted in Applications, 15th October 2008 15:11 GMT
A formatting fubar involving an Excel spreadsheet has left Barclays Capital
with contracts involving collapsed investment bank Lehman Brothers than it
never meant to acquire.

Working to a tight deadline, a junior law associate at Cleary Gottlieb Steen &
Hamilton LLP converted an Excel file into a PDF format document. The doc was
to be posted on a bankruptcy court's website before a midnight purchase offer
deadline on 18 September, just four hours after Barclays sent the spreadsheet
to the lawyers. The Excel file contained 1,000 rows of data and 24,000 cells.
Click here to find out more!

Some of these details on various trading contracts were marked as hidden
because they were not intended to form part of Barclays' proposed deal.
However, this "hidden" distinction was ignored during the reformatting process
so that Barclays ended up offering to take on an additional 179 contracts as
part of its bankruptcy buyout deal, Finextra
(www.finextra.com/fullstory.asp?id=19135) reports.

The error was discovered on 1 October, after US Bankruptcy Judge James Peck
approved the deal, prompting a legal motion (pdf)
(abovethelaw.com/Barclays%20Relief%20Motion.pdf) from Barclays to amend
the deal, excluding the scores of contracts it states were mistakingly
included in the agreement. The story was broken by legal tabloid Above The Law.

Lehman Brothers sought bankruptcy projection on 15 September, a move that set
off a chain of events that have shaken confidence in global financial
institutions and the collapse of stock markets across the globe that has only
been partially reversed by unprecedented government bail-outs to the banking
sector. Barclays first offered to buy a "stripped clean" portion of Lehman for
around $1.75bn on 16 September.

A revised version of the deal was eventually agreed on 18 September, largely
focusing on the New York arm of Lehman's business (including its $910m-valued
headquarters) and responsibility for 9,000 former employees. Barclays paid
$1.35bn for these assets as well as taking on responsibility for some of
Lehman's trading positions which, because of the formatting error, became more
numerous than it intended.

It's unclear what the financial ramifications of the formatting error might
be. Excel spreadsheets might seem a fairly unsophisticated method of logging
multi-billion pound trading positions, but they are quick to produce and easy
to understand - vital consideration in a financial market - which makes them
widely used.

A hearing on Barclays Capital's attempts to extricate itself from the mess
created by the dodgy Excel conversion is pencilled in for 5 November. ®