With a nod to country singer Kenny Rogers, a federal judge has refused for now to allow insurers for former officers and directors of Lehman Brothers Holdings Inc to pay $90 million to settle a fraud lawsuit brought by investors.
US District Judge Lewis Kaplan in Manhattan on Thursday directed five former officers of the investment bank, including Chief Executive Richard Fuld, to file financial paperwork by May 10 to help him decide whether the settlement is fair.
Kaplan will review not only whether their combined liquid net worth is less than $100 million, as a mediator had found, but also whether they have other assets that could be tapped to help former Lehman investors recoup their losses on tens of billions of dollars of securities.
"Without knowing whether and to what extent these defendants could withstand a judgment in excess of the insurance money now on the table, the court would be severely handicapped in coming to an informed view on the question before it," Kaplan wrote.
The judge quoted Rogers' signature song "The Gambler" to explain his decision.