Farmers Sue MF Global CEO Over Lost Billions

January 11, 2012

ABC News

By Cindy Galli

Montana farmers have filed a class action suit against former New Jersey governor Jon Corzine, charging that the failed financial firm run by Corzine stole millions from their accounts to pay off its spiraling debts, and that Corzine’s “single-minded obsession” with making MF Global a big player on Wall Street led to the firm’s collapse.

MF Global’s clients included 38,000 wheat farmers, cattle ranchers and others who “hedged” their crop prices by placing millions in MF Global accounts. Those accounts were supposed to be “segregated and secure,” according to the federal suit, meaning MF Global could not draw on those funds.

The lawsuit, filed on behalf of all 38,000 customers, alleges that when MF Global made a series of bad investments — notably in European debt — it began “siphoning funds withdrawn from segregated client accounts” to cover its debts.

“This is a suit by the real victims of MF Global,” said plaintiff’s attorney Mark Baker of the law firm Anderson, Baker & Swanson. “The missing funds were not investments in MF Global, or loans to MF Global, but rather the customer’s own money as collateral to guaranty their contracts. They were not to be used by others – let alone their own broker – to speculate on risky and exotic securities.”

Click here for the full report from ABC News.

Guatemalans Sue Over 1940s US Syphilis Experiments

March 14th, 2011

Washington Post

By: AP

Guatemalans subjected to U.S. syphilis experiments in the 1940s are suing federal health officials to compensate them for health problems they have suffered.

The lawsuit comes after revelations that U.S. scientists studying the effects of penicillin in the 1940s deliberately infected about 700 Guatemalan prisoners, mental patients, soldiers and orphans. None was informed or gave consent.

Attorneys representing the Guatemalans asked the Obama administration to set up an out-of-court claims process similar to those established in the Gulf of Mexico oil spill and the 9/11 terror attacks. But they say they got no response by a Friday deadline and so filed the suit Monday morning.

The Guatemalan experiments were hidden for decades, until a medical historian uncovered the records in 2009.

Click here for the full report from the Washington Post

Breast Cancer Foundation Sues Charities Over The Word ‘Cure’

January 5th, 2010

The Huffington Post

By: Laura Bassett

In addition to raising millions of dollars a year for breast cancer research, fundraising giant Susan G. Komen for the Cure has a lesser-known mission that eats up donor funds: patrolling the waters for other charities and events around the country that use any variation of “for the cure” in their names.

So far, Komen has identified and filed legal trademark oppositions against more than a hundred of these Mom and Pop charities, including Kites for a Cure, Par for The Cure, Surfing for a Cure and Cupcakes for a Cure–and many of the organizations are too small and underfunded to hold their ground.

“It happened to my family,” said Roxanne Donovan, whose sister runs Kites for a Cure, a family kite-flying event that raises money for lung cancer research. “They came after us ferociously with a big law firm. They said they own ‘cure’ in a name and we had to stop using it, even though we were raising money for an entirely different cause.”

Donovan’s sister, Mary Ann Tighe, said the Komen foundation sent her a letter asking her to stop using the phrase “for a cure” in their title and to never use the color pink in conjunction with their fundraising. What bothered her most about the whole ordeal, she said, was that Komen forced her to spend money and time on legal fees and proceedings instead of raising funds for cancer.

“We were certainly taken aback by it,” she told HuffPost. “We have partners running these kite events around the country. What if one of them uses, say, magenta? Is that pink? I mean, where are we going with this? We just want to raise money for cancer. What we don’t want is to have our energy misplaced by having our charity partners trying to police the good work that we’re doing.”

Sue Prom, who started a small dog sledding fundraiser for breast cancer called “Mush for the Cure” in Grand Marais, Minn., said she was shocked to hear from Komen’s lawyers this summer asking that she change the name of her event or face legal proceedings.

“I had to call the trademark helpline, because I had no idea what I was doing,” said Prom, who runs the annual sled race with her husband and friend. “We pay for the expenses out of our pockets, and we’ve never personally made a dime from it. We have t-shirts, sweatshirts, domain names, posters, stationery, all with ‘Mush for the Cure’ on it. What do we do with all the materials now? How are we gonna defend ourselves? We’re not like Komen.”

Prom said she’s been running the event for six years, and the most she has raised for the National Breast Cancer Foundation is $25,000. Before the NBCF could accept the money, they warned her to file for a trademark to protect her event legally against the Komen Foundation. But now that Komen has opposed Mush’s trademark application with the U.S. Patent and Trademark Office, Prom is looking for a pro bono lawyer to help her figure out what to do next.

“I think it’s a shame,” she said. “It’s not okay. People don’t give their money to the Komen Foundation and they don’t do their races and events so that Komen can squash any other fundraising efforts by individuals. That’s not what it’s about.”

Komen’s general counsel, Jonathan Blum, told HuffPost that the fundraising powerhouse tries to be reasonable when dealing with small charities and nonprofits, but that it has a legal duty to protect its more than 200 registered trademarks.

“It’s never our goal to shut down a nonprofit,” he said, “and we try very hard to be reasonable, but it’s still our obligation to make sure that our trademarks are used appropriately so there’s no confusion in the marketplace over where people’s money is going.”

Blum told HuffPost that legal fees comprise a “very small part” of Komen’s budget, but according to Komen’s financial statements, such costs add up to almost a million dollars a year in donor funds.

“I think it’s important that charities protect their brand, but on the other hand, I don’t think the donors’ intent in giving their money was to fund a turf war,” said Sandra Minuitti, a spokesperson for Charity Navigator. “It’s very important that Komen treads carefully and is very transparent about how they’re spending money on these legal battles.”

Michael Mercanti, an intellectual property lawyer, said he is surprised by the large number of oppositions Komen has filed against other charities–a number he would expect from a company like Toys”R”Us or McDonalds, but not a charitable fundraising organization.

“They seem to be very aggressive in policing their mark, or what they’re claiming to be their mark,” he told HuffPost. “I guess there are a lot of ways to captain a ship, but it seems like there are ways they could protect and police their trademarks and also allow other charities to coexist.”

Mercanti said filing hundreds of oppositions is not only damaging to other charities, but could also be counterproductive for Komen’s brand.

“They could actually be seen as being a bully,” he said. “They’re going to alienate some donors who don’t appreciate them stepping on smaller, worthwhile charities.”

With the help of a team of pro bono lawyers, Kites for a Cure was able to reach a settlement with Komen: They agreed to only use the phrase “for a Cure” in conjunction with the words “lung cancer” to make the distinction clear. But Tighe said they reached a settlement only after many, many months of a free legal team working long hours each day.

“We were very fortunate because we had strong support from knowledgeable pro bono counsel, but it did seem like a misdirection of a lot of people’s energy,” she told HuffPost. “I don’t know what smaller organizations do without free representation.”

Sue Prom said Tighe has already put her in touch with her pro bono legal team, and she is prepared to fight for the name of her sledding event in court. The ordeal has changed her opinion of Komen.

“I used to give money to Komen all the time, but now I’m just kind of wary of them,” she said. “I’m not buying Yoplait yogurt or anything that has the word ‘Komen’ on it. They seem to have forgotten what charity is about.”

Click here for the full report from the Huffington Post

Landmark Case Could Allow Injured Persons to Sue Vaccine Makers

October 13th, 2010

Natural News

By: Ethan A. Huff

Vaccines are implicated in causing all sorts of health damage, from neurological disorders like autism and Alzheimer’s disease to intestinal problems like ulcerative colitis and Chron’s disease — and everything in between. And a vaccine injury case currently before the Supreme Court could be the landmark decision that once again allows those injured by vaccines to sue vaccine manufacturers for damages, a course of action that has been barred since 1986 because of special federal protections enacted to immunize vaccine manufacturers against having to abide by the rule of law.

Nearly 25 years ago, the U.S. Congress passed the 1986 National Childhood Vaccine Injury Act, which exempts vaccine manufacturers from being liable for damages caused by their vaccines. The Act established an entirely new “legal” system to deal specifically with vaccine injury cases, handling each one in a special “vaccine court” that essentially just dismisses most cases as unwarranted.

The Act is entirely unconstitutional as no company or entity can legally be exempted from due process within the real legal system, but it was enacted anyway and has served as a shelter for vaccine companies to hide behind in order to avoid costly litigation. And since the medical industry as a whole continues to deny a link between vaccines and autism, for instance, the “vaccine courts” can just automatically go along with the notion and arbitrarily reject all autism-related vaccine cases as unsubstantiated.

But all that could change, depending on how the Supreme Court handles a case currently before it involving a young lady whose parents say she became permanently injured by a diphtheria, pertussis, and tetanus (DPT) vaccine called Tri-Immunol that she received when she was a child. The Bruesewitz’s say that Wyeth, the manufacturer of the DTP vaccine, knew about a safer version of the vaccine, but continued to sell the dangerous one anyway. Now their daughter Hannah requires costly, specialized care for the rest of her life.

The case was first rejected in “vaccine court” when just a month before the case was to be heard, the court removed all the reported severe injuries from the list of compensatory items. After then taking the case to civil courts, the Bruesewitz’s were told that the case was automatically invalid because of the federal Vaccine Act. So now the case sits before the Supreme Court where, if determined in the Bruesewitz’s favor, will set a new precedent whereby vaccine manufacturers will no longer be able to avert the rule of law.

The illegitimacy of ‘vaccine court’
Much like the phony Internal Revenue Service (IRS) “tax courts”, “vaccine courts” have no justifiable basis anywhere in the law. They serve as nothing more than a way for drug companies to avoid having to bear responsibility for the harm caused by their vaccines. Any other person or company must go through the standard legal process, but the federal Vaccine Act literally grants special legal immunity to vaccine makers that nobody else receives.

There are a few cases where “vaccine courts” have ruled in favor of plaintiffs, but such cases are likely just a ploy to trick the public into thinking such courts are legitimate and lawful. Most cases are rejected by “vaccine court” and, even though plaintiffs can then take the case to civil courts, the process has been made very difficult because of the federal Vaccine Act.

Even though $154 million was paid in 2010 for “vaccine court” cases, that amount is a mere fraction of the overall profits vaccine companies rake in every year. And truth be told, vaccine manufacturers do not even pay such settlements.

Vaccine companies don’t even injury settlements, the public does!
Of the few cases that are actually ruled in favor of injured plaintiffs in “vaccine courts”, not a single one of them is paid for by the vaccine manufacturers that cause the harm. A special excise tax is collected when vaccines are sold to the public, which is later used as settlement compensation. This means that insurance companies and ultimately the public end up paying for vaccine settlements while the vaccine manufacturers get off scot-free!

So not only are vaccine manufacturers essentially exempted from the real legal system, but the mock legal system set up in their favor actually guards them from having to pay a single cent for damages caused by their products.

It’s time to end the vaccine racket
Proponents of special legal protection for vaccine manufacturers say that it is necessary to protect them from “undue” litigation. But that is precisely what the real court system is for in the first place: to evaluate cases and determine whether or not a defendant is liable for damages. Setting up special “vaccine courts” that bypass due process is tyranny in the name of medicine, and it is simply unacceptable.

Because of “vaccine courts”, the idea that vaccines are in any way related to causing autism has been dismissed all across the board, even though numerous studies and research data continue to suggest a connection. And in the case of Hannah Bruesewitz, the system permits gross negligence on the part of vaccine manufacturers to go unpunished, unless of course the Supreme Court decides to do the right thing.

Click here for the full report from Natural News

Group Out To Yank Toys Out Of Happy Meals

October 6th, 2010

Daily Finance

By: Jonathan Berr

In June, the Center for Science and the Public Interest (CSPI) threatened to sue McDonald’s (MCD) over the use of toys to promote Happy Meals. Now, it looks like it will finally happen.

CSPI had originally threatened to file suit against the world’s largest restaurant chain by July. That timeline proved too optimistic to given the complexities of the case, according to Stephen Gardner, the organization’s litigation director.

“Everything takes longer than I think because I am an optimist,” he says in an interview. “It could be next week (when it will be filed), but it’s more likely to be the week after.”

The conflict between McDonald’s and CSPI centers around childhood obesity rates, which have more than tripled over the past 30 years, Some argue that McDonald’s and other purveyors of cheap, calorie-rich food bear some of the blame, an argument the fast-food chain rejects.

A Matter of Rights

McDonald’s, which is fighting an effort in San Francisco to ban Happy Meal toys, has said that CSPI’s claims are without merit. Chief Executive Jim Skinner wrote to the advocacy group in July saying that most consumers have no problems with how Happy Meals are marketed. “Parents, in particular, strongly believe that they have the right and responsibility to decide what’s best for their children, not CSPI,” he writes. “It’s that simple.”

According to Gardner, McDonald’s is using the Happy Meal toys, which often promote movies, to deceptively market unhealthy food to children, who in turn beg their parents to take them to the restaurant. CSPI, he says, is trying to assist parents, not usurp their authority.

“Kids under the age of eight do not understand that they are being advertised to,” Gardner says.”It’s without question that it’s detrimental to kids.”

The home of the Golden Arches is fighting against Happy Meal critics in California as well. Officials in Santa Clara voted in April to ban McDonald’s and other fast-food restaurants from providing promotional toys. A similar measure is pending before the San Francisco Board of Supervisors, which would prevent chains from “putting toys in children’s meals unless they include fruits and vegetables and don’t have too many unhealthy calories,” according to the Associated Press.

No surprisingly, McDonald’s sees things differently.

“As we have previously stated, we will continue to work with city officials to identify a solution to the very important topic of childhood obesity,” says Danya Proud, a company spokesperson, in a statement. “Even with the amendments the supervisors have made, this proposal is not what our customers want, nor is it something they asked for.”

Investors don’t appear to be too worried about the controversy. Shares of McDonald’s are up more than 21% this year. Gardener says he isn’t aware of other local governments demanding action on Happy Meal toys.

Click here for the full report from Daily Finance

Court Sides With CIA On ‘Extraordinary Rendition’

September 10, 2010

The New York Times

By: Charlie Savage

A federal appeals court on Wednesday ruled that former prisoners of the C.I.A. could not sue over their alleged torture in overseas prisons because such a lawsuit might expose secret government information.

The sharply divided ruling was a major victory for the Obama administration’s efforts to advance a sweeping view of executive secrecy powers. It strengthens the White House’s hand as it has pushed an array of assertive counterterrorism policies, while raising an opportunity for the Supreme Court to rule for the first time in decades on the scope of the president’s power to restrict litigation that could reveal state secrets.

By a 6-to-5 vote, the United States Court of Appeals for the Ninth Circuit dismissed a lawsuit against Jeppesen Dataplan Inc., a Boeing subsidiary accused of arranging flights for the Central Intelligence Agency to transfer prisoners to other countries for imprisonment and interrogation. The American Civil Liberties Union filed the case on behalf of five former prisoners who say they were tortured in captivity — and that Jeppesen was complicit in that alleged abuse.

Judge Raymond C. Fisher described the case, which reversed an earlier decision, as presenting “a painful conflict between human rights and national security.” But, he said, the majority had “reluctantly” concluded that the lawsuit represented “a rare case” in which the government’s need to protect state secrets trumped the plaintiffs’ need to have a day in court.

While the alleged abuses occurred during the Bush administration, the ruling added a chapter to the Obama administration’s aggressive national security policies.

Its counterterrorism programs have in some ways departed from the expectations of change fostered by President Obama’s campaign rhetoric, which was often sharply critical of former President George W. Bush’s approach.

Among other policies, the Obama national security team has also authorized the C.I.A. to try to kill a United States citizen suspected of terrorism ties, blocked efforts by detainees in Afghanistan to bring habeas corpus lawsuits challenging the basis for their imprisonment without trial, and continued the C.I.A.’s so-called extraordinary rendition program of prisoner transfers — though the administration has forbidden torture and says it seeks assurances from other countries that detainees will not be mistreated.

The A.C.L.U. vowed to appeal the Jeppesen Dataplan case to the Supreme Court, which would present the Roberts court with a fresh opportunity to weigh in on a high-profile test of the scope and limits of presidential power in counterterrorism matters.

It has been more than 50 years since the Supreme Court issued a major ruling on the state-secrets privilege, a judicially created doctrine that the government has increasingly used to win dismissals of lawsuits related to national security, shielding its actions from judicial review. In 2007, the Supreme Court declined to hear an appeal of a similar rendition and torture ruling by the federal appeals court in Richmond, Va.

The current case turns on whether the executive can invoke the state-secrets privilege to shut down entire lawsuits, or whether that power should be limited to withholding particular pieces of secret information. In April 2009, a three-judge panel on the Ninth Circuit adopted the narrower view, ruling that the lawsuit as a whole should proceed.

But the Obama administration appealed to the full San Francisco-based appeals court. A group of 11 of its judges reheard the case, and a narrow majority endorsed the broader view of executive secrecy powers. They concluded that the lawsuit must be dismissed without a trial — even one that would seek to rely only on public information.

“This case requires us to address the difficult balance the state secrets doctrine strikes between fundamental principles of our liberty, including justice, transparency, accountability and national security,” Judge Fisher wrote. “Although as judges we strive to honor all of these principles, there are times when exceptional circumstances create an irreconcilable conflict between them.”

Ben Wizner, a senior A.C.L.U. lawyer who argued the case before the appeals court, said the group was disappointed in the ruling.

“To this date, not a single victim of the Bush administration’s torture program has had his day in court,” Mr. Wizner said. “That makes this a sad day not only for the torture survivors who are seeking justice in this case, but for all Americans who care about the rule of law and our nation’s reputation in the world. If this decision stands, the United States will have closed its courts to torture victims while providing complete immunity to their torturers.”

Some plaintiffs in the case said they were tortured by C.I.A. interrogators at an agency “black site” prison in Afghanistan, while others said they were tortured by Egypt and Morocco after the C.I.A. handed them off to foreign security services.

The lead plaintiff is Binyam Mohamed, an Ethiopian citizen and legal resident of Britain who was arrested in Pakistan in 2002. He claimed he was turned over to the C.I.A., which flew him to Morocco and handed him off to its security service.

Moroccan interrogators, he said, held him for 18 months and subjected him to an array of tortures, including cutting his penis with a scalpel and then pouring a hot, stinging liquid on the open wounds.

Mr. Mohamed was later transferred back to the C.I.A., which he said flew him to its secret prison in Afghanistan. There, he said, he was held in continuous darkness, fed sparsely and subjected to loud noise — like the recorded screams of women and children — 24 hours a day.

He was later transferred again to the military prison at Guantánamo Bay, Cuba, where he was held for an additional five years. He was released and returned to Britain in early 2009 and is now free.

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Almond Growers Can Now Sue USDA

August 11, 2010

Natural News

by Mike Adams

Three years after the USDA destroyed the U.S. raw almond business by forcing almond producers to fumigate or pasteurize their nuts, a significant victory has been achieved that could overturn that onerous regulation. A federal appeals court has ruled that California almond farmers may now challenge the USDA regulation in the courts.

Why is this a victory? Because for years, a federal district court has ruled that almond growers could not even challenge the rule. The USDA’s power over farmers was absolutely, the court seemed to say, and no mere peasants can challenge the King.

But today that has all changed. A Cornucopia Institute press release announces the details of this court decision:

From the Cornucopia Institute…
See original release at http://www.cornucopia.org/2010/08/f…

WASHINGTON, DC – A federal appeals court ruled today, overturning a lower court decision, that a group of California almond farmers have the right to challenge a USDA regulation requiring the treatment of their raw almonds with a toxic fumigant or steam heat prior to sale to consumers. For the past three years, the U.S. Department of Agriculture has denied American consumers the right to buy raw almonds, grown in the USA, when they shop in grocery and natural food stores.

A group of almond growers sued the government to challenge USDA’s rule, but the federal district court ruled that courtroom doors were closed to the growers’ claims. The controversial rule has cost individual farmers millions of dollars in lost sales since it was enacted in September 2007.

“We are delighted by the court’s decision,” said Will Fantle, Cornucopia’s Research Director. Cornucopia has been coordinating the legal strategy for the farmers’ lawsuit. “At long last the farmers who have been injured by this rule will have the opportunity to stand in court and state why this poorly thought out regulation should be thrown out,” Fantle added.

The USDA and the Almond Board of California imposed the treatment scheme to minimize the risk of salmonella contamination outbreaks like those that had occurred with almonds in 2001 and 2004. USDA investigators were never able to determine how salmonella bacteria somehow contaminated the raw almonds that caused the food illnesses but they were able to trace back one of the outbreaks, in part, to the country’s largest “factory farm,” growing almonds and pistachios on over 9000 acres.

Family-scale growers have argued that the onerous and expensive mandated treatment regime is only needed by the giant industrial producers, who have less control over the quality of their nuts, and has hurt their market because it consumer resistance.

Many in the industry have questioned the logic exempting foreign-grown almonds from the treatment scheme. Imports have displaced raw domestic nuts in many major markets and retail locations across the U.S. This regulatory loophole is part of what has been crushing California producers.

“I am very happy with this first step in overturning this destructive regulation,” said Nick Koretoff, an almond farmer and plaintiff in the lawsuit. “The treatment mandate has been a financial catastrophe for me. My consumers want raw, untreated healthy almonds and I have been denied the opportunity to sell them what they want.”

Attorney John Vetne, who has been representing the almond farmers, said the Appeals Court made a “very strong decision affirming farmers’ rights.” The USDA had been arguing that farmers did not even have the right to legally challenge the USDA regulation. “We are pleased that the Appeals Court rejected USDA’s argument that courthouse doors are closed to farmers. We now intend to demonstrate to the federal district court that USDA acted outside of authority granted by Congress when it denied California almond growers a consumer market for raw almonds,” Vetne added.

Tens of thousands of consumers have expressed their discontent with the raw almond treatment rule in comments to the USDA. Organic and raw foods enthusiasts were particularly incensed that the nuts, despite being processed with propylene oxide (identified as a carcinogen by the federal EPA) or steam-heat, were still allowed to be labeled as “raw” — many believe that essential nutrients in food can be destroyed by heat, radiation and toxic chemicals.

The Cornucopia Institute, an organization known for its research and defense of family farmers involved in organics, artisan and local food production, was impressed with how many consumers have a real passion for maintaining the availability of raw food and nuts, including almonds, and have been willing to financially support the farmers in their legal challenge. “Contributions continue to flow in supporting this effort,” Fantle noted.

“I and many of my friends look forward to the day when we will once again be able to easily purchase truly raw, authentic almonds from California in my local store,” said Joan Levin, a Chicago resident and raw foods consumer. “We hope this Appeals Court ruling brings that day closer,” she said.

Click here for the full report.

Administration To Sue AZ Over Immigration Law

June 18, 2010

Associated Press

By Amanda Lee Myers

PHOENIX – Arizona Gov. Jan Brewer said Thursday she’s angry over comments by Secretary of State Hillary Rodham Clinton that the Obama administration will sue the state over its new immigration law.

In a June 8 media interview in Ecuador that began circulating Thursday in the U.S., Clinton said President Barack Obama thinks the federal government should determine immigration policy and that the Justice Department “will be bringing a lawsuit against the act.”

Justice spokeswoman Tracy Schmaler on Thursday declined to say whether the department would sue and that “the department continues to review the law.”

The department has been looking at the law for weeks for possible civil rights violations, with an eye toward a possible court challenge.

It’s unclear why Clinton made the comment since it’s not her area. She couldn’t be reached Thursday for comment.

State Department spokesman P.J. Crowley said Obama and Clinton have both made it clear that the administration opposes the law.

“I will defer to the Justice Department on the legal steps that are available and where they stand on the review of the law,” Crowley said. “The secretary believes that comprehensive immigration reform is a better course of action.”

Brewer, a Republican, said in a statement that “this is no way to treat the people of Arizona.”

“To learn of this lawsuit through an Ecuadorean interview with the secretary of state is just outrageous,” she said. “If our own government intends to sue our state to prevent illegal immigration enforcement, the least it can do is inform us before it informs the citizens of another nation.”

Brewer spokesman Paul Senseman said the governor was “outraged” and that Clinton’s comments make it appear that the Justice Department has decided to file suit.

“But she’s confident that in the end, the state of Arizona, the citizens, will prevail,” he said.

On April 23, Brewer signed what is considered the toughest legislation in the nation targeting illegal immigrants. It is set to go into effect July 29 pending multiple legal challenges and the Justice Department’s review.

Click Here for the Full Report

Lehman Brothers Sue Barclays for 5 Billion Dollars

November 19, 2009

Bloomberg.com

By Tiffany Kary

(Bloomberg) — Lehman Brothers Holdings Inc.’s bankrupt estate and a trustee for its brokerage both sued Barclays Plc, seeking the return of a $5 billion “windfall.”

Lehman seeks a trial to recover the money, along with damages, according to the lawsuit, filed yesterday as an adversary proceeding in Lehman’s main case in U.S. Bankruptcy Court in Manhattan. Undisclosed features of the sale included $5 billion to $7 billion in excess collateral under a repurchase agreement, $2.7 billion added while a sale hearing in court was in progress, and $2.3 billion in margin deposits added after the sale was approved, lawyers for Lehman said.

“The sale transaction was secretly structured from the outset to give Barclays an immediate and enormous windfall profit,” lawyers for Lehman said, claiming some Lehman executives knew the information without revealing it to the company’s management, board or attorneys.

Barclays also failed to pay about $500 million in bonuses and paid only $238 million of $1.5 billion in other obligations, according to the lawsuit.

Separately, James Giddens, the trustee liquidating Lehman’s brokerage on behalf of the U.S. Securities Investor Protection Corp., filed a lawsuit alleging cash and other assets worth $6.7 billion weren’t sold to Barclays. He also seeks to recover all other undisclosed benefits that Barclays obtained at the expense of the Lehman estate.

Third Lawsuit

In a third lawsuit filed yesterday, Lehman creditors seek a ruling that the transaction that gave Barclays the $5 billion was never approved by the court. They say a “clarification letter” dated Sept. 20, 2008, wasn’t presented in court when U.S. Bankruptcy Judge James Peck approved the sale Sept. 19.

The letter “crystallized Barclays receipt of a secret, undisclosed, $5 billion block discount” on the assets it bought from Lehman, creditors said in the complaint.

Lehman previously said in court documents that executives including Ian Lowitt, Paolo Tonucci and Bart McDade knew that Barclays was getting securities valued at about $50 billion for $45 billion in cash.

Lehman’s $1.75 billion sale to London-based Barclays was approved following the biggest bankruptcy in U.S. history. Peck overruled creditors’ objections that the sale was moving too quickly. He said it was clear there were no other purchasers, and that the deal was needed to help stabilize global financial markets.

Harvey Miller, Lehman’s bankruptcy lawyer, said at the time that the Barclays deal needed to close as soon as possible or employees would flee and there wouldn’t be anything left to sell.

Michael O’Looney, a Barclays spokesman, declined to comment yesterday. Barclays declined 2.8 percent to 315 pence in London trading, valuing the bank at 35.9 billion pounds ($60 billion).

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The trustee’s adversarial proceeding to the main case is 09-01732, U.S. Bankruptcy Court, Southern District of New York (Manhattan)

Click here for the full report