Lehman’s Brother administration has been “single, largest settlement of its kind”, says PwC
Wind up will take 10 years
Total cash realised to date is £12.6bn
First interim distribution to creditors hoped for in 2012
Winding up Lehman Brothers’ London-based operations has earned PricewaterhouseCoopers (PwC) more than £400m since it was appointed to handle the US bank’s administration three years ago.
In the six months to the end of June alone the payroll bill came to £33m. The fee does not include salaries of 495 former Lehman Brothers staff and contractors who are helping with the work.
The total cash realised to date is £12.6bn including £1.8bn from house assets in the past six months.
Tony Lomas, joint administrator and partner at PwC said that Lehman Brothers had been the “single, largest settlement of its kind, to date, in the administration.”
He said that PWC had recently agreed “claims between LBIE [Lehman Brothers International Europe] and a number of Hong Kong based Lehman companies and we have reached agreement in principle with LBHI [Lehman Brother Holdings] and other US based Lehman companies that are in Chapter 11 bankruptcy proceedings.”
PwC are also pursuing substantial claims against several other Lehman Affiliates in an effort to avoid litigation.
“In the coming months, a number of important legal appeals will be heard in the UK Courts, including the Supreme Court proceedings relating to client money. The outcome of these cases will materially influence the value and timing of the eventual recovery for ordinary unsecured creditors… we remain hopeful of making a first, interim distribution to creditors at some stage during 2012,” said Lomas.
More than 250 staff working on the case, which is expected to be completed in 10 years. An application will be made to the UK High Court next month to extend the administration period for a further five years.
- The consensual approach for the agreement of unsecured claims continues to make progress with a further 309 Claims Determination Deeds to creditors with a total claims value of about £1.5bn. Some £1bn of claims have been formally agreed in respect of this.
- 1,500 lines of client assets have been returned in the period meaning the administrators have now returned more than £13bn in client assets and collateral releases to date.
- LBIE’s house claim of $8.9bn has been denied by LBI, so LBIE has filed a formal objection and a scheduling order for trial has been agreed. LBI also submitted a revised inbound claim of £8.8bn against LBIE and this is now under review.
Lehman Brothers International (Europe) In Administration – Joint Administrators’ Progress Report
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