Hedge fund to challenge Lehman sale to Barclays

NEW YORK (Reuters) - A hedge fund that specializes in distressed investments has filed a notice of appeal in the Lehman Brothers Holdings Inc (LEHMQ.PK) bankruptcy case, indicating it intends to challenge the court order approving the sale of Lehman's core U.S. business to Barclays Plc (BARC.L).

The fund, Bay Harbour Management, did not disclose in the filing what it plans to argue in the appeal, but in court last week it filed an objection to the sale based on concerns about an $8 billion transfer from the investment bank's European unit to its U.S. unit just before Lehman filed for bankruptcy protection.

A Bay Harbour attorney did not immediately return a call seeking comment.

U.S. Bankruptcy Judge James Peck approved the sale of the Lehman assets to Barclays on Saturday, saying he had found no better alternative for the assets Lehman sought to sell.

(Reporting by Emily Chasan; editing by John Wallace)