Real estate trust sues Barclays over bond deals

NEW YORK (Reuters) - A U.S. real estate investment trust sued a unit of Barclays Plc (BARC.L) on Tuesday, alleging the bank used the crisis in the credit markets to unreasonably mark down the value of bonds it held as collateral.

Luminent Mortgage Capital Inc LUM.N and subsidiaries sued the Barclays Capital Inc division of the British bank alleging breach of contract and other charges, according to the complaint filed in U.S. District Court in Manhattan.

A copy of the complaint was provided to Reuters by Luminent's law firm O'Shea Partners LLP. A Barclays spokeswoman declined to comment.

"Defendant accomplished its money-grab at plaintiffs' expense by falsely discounting and misrepresenting the true value of the bonds," the complaint alleged.

Barclays misrepresented "its liquidation efforts in order to misappropriate a significant portion of the securities' value," it read.

In August, Barclays demanded about $35 million in payments from the plaintiffs to cover a purported shortfall in the value of some bonds against the backdrop of the crisis in the subprime mortgage loan market, according to the complaint.

Luminent said it refused to submit to the payment demands as the bonds were "much more valuable than Barclays was representing them to be."

"Barclays was simply exploiting an aberrational market as a pretext to unreasonably mark down the purported value of the bonds, demand an unreasonable amount of additional collateral from plaintiffs, and then confiscate a portion of the value contained in certain of the bonds," the complaint alleged.

Last month, Luminent separately sued HSBC Holdings Plc's (HSBA.L) broker-dealer unit, alleging it had wrongfully confiscated bonds Luminent subsidiaries had put up as collateral for loans.

Late in the session, Luminent shares were down 16 cents or 13.1 percent to $1.06 on the New York Stock Exchange.

(Reporting by Paritosh Bansal, editing by Gerald E. McCormick)