Lehman Brothers International (Europe) – in administration – 18 month progress update

Published at 10:30 AM on 15 April 2010

The Joint Administrators of Lehman Brothers International (Europe) (“LBIE”) have updated the creditor community today with the issue of their progress report for the first 18 months of the administration.

The Administrators are pursuing the objective of maximising recoveries for the company’s creditors.  The report provides details of the progress made in this complex case. 

Steven Pearson, Joint Administrator and partner at PricewaterhouseCoopers LLP said:

“We have had an exceptionally productive 6 months.  We have now gained control of over $48bn of securities and cash to date.  As advised in January, we have implemented a highly innovative Claim Resolution Agreement, which has enabled us to begin returning client assets.  I expect the unsecured claim determination framework to be materially advanced over the next six months.”

Commenting on the reason for the strong progress Pearson observed, “The collaboration between the Lehman staff, PwC teams and our legal advisers has been central to our progress.  The manner in which the combined team has dealt with the challenges of the past 6-months is reflected in our combined achievements.  We are very well positioned to deal with the ongoing challenges of this unprecedented case.”

Key achievements to date:

 

  • The administrators have gained control of $48.6bn of securities and cash to date, $8.6bn of which has been dealt with in the last six months.

  • A further $1.0bn of assets have been returned to clients in the last six months, bringing the total returned through bilateral agreements to $14.3bn.  In addition, over 90% of client asset creditors signed up to the Claim Resolution Agreement (“CRA”) and the first returns to clients under this agreement have been made (post 19 March, the bar date under the CRA) and are in addition to the $14.3bn.
  • $13.1bn was held as cash at 14 March 2010.  $13.8bn of securities were under our control at 14 March 2010.

  • LBIE has made excellent progress with affiliate companies within the Lehman Brothers group.  Of particular note was a bilateral asset agreement with Lehman Brothers Japan.  The Administrators have filed $217.3bn of gross claims against affiliates to date.

  • A date for proving unsecured claims against LBIE has been set for 31 December 2010.

  • Administrators’ costs were £57.6m in the 6-month period.  Costs in the 18 months to date represent just 0.65% of total assets controlled by the Administrators.
  • The Administrators concluded a relocation of the LBIE operations from Bank Street to Canada Square in March 2010. The move will result in annual savings of over $73m.

  • Over 440 Lehman staff and contractors continue to support the LBIE administration.  Lehman staff are an integral part of the management and recovery efforts.

 

A copy of the progress report can be downloaded from:  www.pwc.co.uk/lehman

ENDS


Notes to Editors:

Steven Pearson, Tony Lomas, Mike Jervis and Derek Howell and Dan Schwarzmann partners at PricewaterhouseCoopers LLP, were appointed as joint administrators to Lehman Brothers International Europe.

The joint administrators have been appointed to wind down the business in an orderly manner.



For more information contact:

Katherine Howbrook
Financial Services, PR Manager, PwC 
Tel:020 7212 2711 
Mobile:07515 119 096 

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