Lehman Examiner Urges Court To Overrule CME Objections

The court-appointed examiner of the Lehman Brothers Holdings Inc. (LEHMQ) collapse on Tuesday fired back at CME Group Inc. (CME), arguing that the exchange operator must disclose the identity of firms that bid on portions of Lehman's futures portfolio.

The legal team for Anton Valukas told court officials that the public has a right to know which firms got to participate in what amounted to a privately arranged fire sale of Lehman positions held at CME, which resulted in a $1.2 billion loss to the doomed investment bank.

"The only information that CME seeks to redact from the subject documents and keep from public disclosure is the identity of the persons who were permitted to participate in a private auction that apparently resulted in a highly favorable gain to the successful bidders," wrote lawyers for Valukas in documents filed Tuesday with the U.S. Bankruptcy Court of New York's Southern District.

"Should any of the parties wish to bring claims, despite the Examiner's conclusions, they need to know who received the transfers," Valukas' lawyers wrote. "To test the adequacy and fairness of the auction process, the parties need to know who was invited to bid."

At issue are three documents that remain the last obstacle to the full publication of the Lehman examiner's report, the bulk of which was released earlier this month in a 2,200-page document.

CME, the world's largest futures exchange, is fighting to keep confidential the identity of those firms that bid to buy up chunks of Lehman's futures book held at CME in the days following its historic bankruptcy filing in mid-September 2008.

Lawyers for CME argued Monday that the firms' names should be redacted from the three documents, lest the buyers be disadvantaged in the market. CME also argued that confidence in its emergency auction process could be undermined if participants know their identities may be revealed.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

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