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US court upholds ruling in Shinhan Bank-Lehman settlement case

A U.S. district court upheld a bankruptcy judge's ruling over a settlement agreement between South Korea's Shinhan Bank Co. Ltd. and Lehman Brothers Holdings Inc., stating the deal is enforceable in light of email exchanges between the companies' lawyers, The Wall Street Journal reported Aug. 4.

Judge Denise Cote of the U.S. District Court in New York wrote in her opinion that the settlement was reached before the parties signed drafts formalizing the agreement and that the agreement remained unsigned because of Shinhan's own delay and the bankruptcy court's issuance of the dismissal order.

Shinhan and Lehman reached an agreement in 2015 to settle a lawsuit filed by the Lehman estate in 2010 seeking to "claw back" transfers from Lehman leading to its bankruptcy. Shinhan moved to dismiss the suit but eventually reached an agreement to settle the matter for an undisclosed amount. In a June 28, 2016, email, a Shinhan lawyer said the bank had completed its internal approval process and that the settlement would be signed within days. Later that day, the bankruptcy court dismissed the suit in expectation of the settlement.

Shinhan never signed the agreement nor was the settlement amount paid to Lehman. Shinhan claimed the deal was invalid since it was never fully executed. A bankruptcy judge overseeing Lehman's bankruptcy ruled that emails from Shinhan's lawyers showed it entered into a binding contract.

A spokeswoman for Shinhan Bank America declined to comment on the matter.

Shinhan Bank is a unit of Shinhan Financial Group Co. Ltd.