Lehman Brothers's U.K. Administrators Billed $420 Million Since Collapse
Lehman Brothers Holdings Inc.’s European administrators have billed 262 million pounds ($420 million) for work since the bank sought bankruptcy protection in September 2008.
The administrators have recovered 11.9 billion pounds in cash in the 24 months since the bank’s collapse and more than 350 trading counterparties have settled what they owed according to a report today on the PricewaterhouseCoopers LLP website.
“We have achieved exceptional progress in the administration, dealing with some 29 billion pounds of securities and cash, having now returned almost 12 billion pounds of this to clients,” Tony Lomas, the PwC partner on the Lehman administration, said in a statement. “Whilst there are still numerous major challenges to address, our actions to date have generated significant realizations for creditors which will be paid to them in due course.”
Lehman filed the biggest bankruptcy in U.S. history in September 2008 after mounting losses on mortgage-backed securities spooked investors and creditors. The Wall Street investment bank’s failure helped trigger a freeze of global credit markets.
The administrators expect to recover as much as 1.3 billion pounds more for creditors, not including possible awards in lawsuits or other situations where amounts are disputed, according to the report.
Court Cases
The administrators have lost court rulings that have delayed payments and may reduce creditor recoveries in the U.K. and Germany.
A U.K. appeals court ruling forced the administrators to delay a dividend payment scheduled for Feb. 28, the report said. PwC is waiting for permission to challenge the ruling at the U.K. Supreme Court and a hearing could take place as soon as the second quarter of next year.
The administrators are considering appealing Lehman Brothers Bankhaus AG’s Oct. 7 victory at the Frankfurt Regional Court, and will reject “outright” Bankhaus’s $1 billion counterclaim, according to the report.
To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
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