Lehman examiner files unredacted version of report after CME objection

By Caroline Salls

Pittsburgh, April 14 - Lehman Brothers Holdings, Inc. examiner Anton R. Valukas filed an unredacted version of his report Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

The examiner said in the redacted version of his report filed in March that "Lehman was more the consequence than the cause of a deteriorating economic climate."

CME Group, Inc. asked Valukas to maintain the confidentiality of the identity of bidders revealed in documents produced by CME.

In its motion to maintain confidentiality, CME said its concern was maintaining the integrity of the markets for which its subsidiaries, including Chicago Mercantile Exchange, Inc., act as self-regulatory organizations.

To accomplish this, CME Group requested that three documents that reveal detailed bid information, including bidder names, from an auction for exchange-traded futures and options contracts in Lehman's house accounts, which were conducted by CME, not be made public.

"CME Group has asked the examiner to redact bidder names from the confidential documents, but the examiner has refused," CME said in the motion.

"Complying with this request would not thwart the intent and purpose of the examiner report, as no compelling need to reveal bidder names has been identified.

"Indeed, the examiner has concluded that no colorable claims exist against CME or the winning bidders (much less those firms whose bids were rejected)."

In a response to CME Group's motion, Valukas said the three documents in question contained the identity of six bidders "who participated in a private auction that resulted in a $1.2 billion loss to Lehman."

Although he did not feel Lehman had any claims against CME, the examiner said he believed the public should be informed of all of the facts.

In addition, Valukas said CME had already revealed the names of the bidders in question without any claim of confidentiality.

On Wednesday, the unredacted version of the 683-page volume five of the examiner's nine-volume report was filed with the court.

The unsealed report names Barclays, Goldman Sachs, Morgan Stanley, JPMorgan, Citadel LP and DRW Trading as firms selected to participate in the Lehman house position bidding process.

New York-based Lehman Brothers Holdings was the fourth largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008. Its Chapter 11 case number is 08-13555.

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