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Lehman Brothers sues to recover $2.5 billion from Citigroup

Citigroup allegedly held on to the money to ensure it would be first of Lehman’s creditors paid

Four years after the infamous downfall of Lehman Brothers Holdings Inc., the former Wall Street giant is suing Citigroup Inc. for $2.5 billion that was transferred before the collapse, and that Lehman claims Citigroup is wrongly holding on to, to the detriment of other creditors, Thomson Reuters reports.

The complaint filed Wednesday says that Citigroup demanded the money before the 2008 collapse, to protect itself in case there were problems with Lehman’s trading accounts. Then, once Lehman filed its historic $639 billion bankruptcy, Citigroup kept the money—to offset other claims, it said.

Lehman disagrees, saying that the claims Citigroup referenced are based in swap agreements between the two companies and are exaggerated by more than $1 billion. Lehman alleges that Citigroup held on to the money just so it could be paid ahead of Lehman’s other creditors.

"Citi went out of its way to try to help Lehman prior to its bankruptcy filing," Citigroup spokeswoman Danielle Romero-Apsilos said in a statement.

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