Intel is being sued by bankrupt investment bank Lehman Brothers over the chip giant’s alleged breach of a trade agreement made days before Lehman’s collapse in 2008.
The deal in place saw Intel give $1 billion to Lehman Brothers OTC Derivatives Inc (LOTC) in exchange for over 50.5 million shares to be delivered on the settlement date of 29 September, 2008, according to a filing made in the New York bankruptcy court.
The agreement also saw LOTC post $1 billion in cash collateral to Intel, and specified that the manufacturer would be compensated for losses if there was to be an early termination of the deal, reports Reuters.
But while Intel maintained that Lehman was to deliver $1 billion in Intel common stock, Lehman argued the arrangement was to deliver 50.5 million Intel shares regardless of the dollar value. "The value of 50,552,943 shares of Intel common stock on September 29, 2008 was about $873 million, not $1 billion," Lehman said in the filing.
Two weeks before Lehman filed for bankruptcy, Intel terminated the agreement and seized the full $1 billion in collateral and has not returned it, according to the finance group. Lehman claims “Intel breached the swap agreement” by doing so and is now looking to recover an unspecified amount in the lawsuit.
Outside the courtroom it has been business as usual for Intel, which recently disclosed more about its new line-up of Haswell graphics processors – check out our analysis of the latest revelations.