The trustee in charge of liquidating Lehman Brothers Holdings Inc's brokerage business won court approval on Thursday to transfer about $1.6 billion to $1.7 billion of customer property to new accounts at Barclays Plc .

Judge James Peck, approved the bulk transfer at a court hearing, despite objections from some Lehman customers who said the transfer would hurt them if there is a shortfall later and all customer property cannot be recovered.

Barclays will receive about $100 million in the transfer as it had made certain advances or borrowed certain securities to fill holes for customers ahead of the transfer, lawyers said at the hearing.

The trustee, appointed by the Securities Investor Protection Corp (SIPC) has been overseeing the transfers of some $92.5 billion of customer property since Lehman filed for bankruptcy protection on September 15, 2008, in the largest bankruptcy filing in history.

The objections to the transfer stemmed from concerns the trustee was transferring some $300 million to $400 million of securities it had used cash to purchase, because the original securities had gone missing or needed to be replaced. Some customers argued that would disadvantage them if there is a shortfall and not all customers can have their claims satisfied.

The property is mostly being transferred directly into customer accounts, a lawyer for the trustee said.

Judge Peck said he was approving the request because the Lehman customers would benefit from the transfer and refused to allow objecting customers an option to claw back assets, saying such a plan would open Barclays to too much litigation risk.

The bankruptcy case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.

(Reporting by Emily Chasan; editing by Andre Grenon)

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