In Lehman’s case, the battle over swaps shows how far it will go to collect money for creditors, including public pension funds and municipalities that held its bonds. The disputes are taking place in confidential mediation sessions set up by the bankruptcy court in 2009. The aim is to settle disagreements faster, without costly litigation.

Once the world’s fourth-largest investment bank, Lehman filed the biggest bankruptcy in U.S. history on Sept. 15, 2008, after suffering billions in losses on subprime mortgages. It had more than 1.7 million derivative trades with thousands of banks, hedge funds, companies, municipalities and sovereign nations when it filed for protection from creditors.

A derivative is a security whose price is dependent upon one or more underlying assets. Common types include futures contracts, options and interest-rate swaps.

Lehman tacks on interest of almost 14 percent annually on unpaid swap debts, said Phil Weeber, director of risk management at Kennett Square, Pennsylvania-based Chatham Financial, who is advising corporate clients in mediation with the bank’s estate. The rate is based on Lehman’s cost of funds, which is the London Interbank Offered Rate plus 13.5 percent. Lehman’s claims are now almost double the original amount, based on the interest they’re charging, he said.

‘Assertive’ Approach

“Lehman, from the very beginning, said they were going to use an assertive legal strategy to protect the estate,” Weeber said. “That’s what they’re doing, and they’re very good at it.”

Harvey Miller, the Weil Gotshal & Manges LLP partner who has been Lehman’s lead lawyer since the bankruptcy, also declined to comment on the negotiations. The New York-based law firm was paid $3.9 million in February, or about $140,000 a day.

Under bankruptcy law, lawyers and managers of a failed company have a duty to raise as much money for creditors as they can.

Lehman exited bankruptcy in March 2012 and is still liquidating. It has distributed about $47.2 billion and wants pay creditors $65 billion by about 2016. Creditors will get an average of 18 cents on the dollar.

Stopping Fighting