Fremont had a about $2 million corporate bond and $2 million commercial paper investment with Lehman that are worth nothing since the investment bank went belly up. Fremont’s investment holdings are worth more than $300 million. The city is trying its luck with bankruptcy court and holding out hope that the feds will allow cities to recoup their losses.
But if that doesn’t pan out, its holding out hope that it can recoup its loses by suing the firms that handled the investment and didn’t tell them that Lehman was about to go kaput. The County of San Mateo and the city of Long Beach are doing the same thing with the same lawyers, a Fremont official said.