Court decision could spell trouble for Lehman down under

Australian investors in Lehman Brothers and affiliated companies are free to pursue more than 600 million Australian dollars ($551 million) in damages after the High Court on Tuesday dismissed two appeals. The decision upheld a Federal Court decision that found a settlement deal approved by a majority of Lehman Australia's creditors last June was void. That settlement had barred creditors from suing overseas branches of the failed investment giant. The High Court said it would provide reasons for its decision at a later date. The decision against defendants Lehman Brothers Asia Holdings and Lehman Brothers Holdings Inc. means investors in Lehman Australia and other companies in the Lehman Group can start litigation to recover their losses. The investors, including about 90 local councils, are owed over 600 million Australian dollars on investments that went bad following Lehman Brothers' collapse in New York in September 2008. Lehman's collapse was the biggest corporate bankruptcy in U.S. history. Lehman Australia — and its biggest creditor, Lehman Brothers Asia Holdings — are both in liquidation.