PwC seeks court approval for Lehman plan

PricewaterhouseCoopers’ administration of Lehman Brothers will take a significant step forward today when the firm asks the High Court to approve a ‘scheme of arrangement’ that will create the structure for meeting the demands of the bank’s creditors.

The scheme would structure creditors into three classes of priority allowing administrators to manage the claims of more than 1,000 according to their classification rather than individually.

Steven Pearson, one of the join administrators on the Lehman job, is quoted in the Financial Times today saying: ‘This is probably the most complex scheme out there.’

He is reported saying the firm went through at least 30 drafts before settling on the version before the court today.

In a statement he said: 'Fundamentally, the scheme proposes a compromise on all sides to cut through the multiplicity of complex issues to deliver a fair solution. It has the unanimous support of the LBIE creditors’ committee, which contains representatives of both trust clients and general estate unsecured creditors.

'The scheme will impose a bar date (expected to be 31 December 2009) which will enable us to determine with certainty the population of trust claimants, allow the valuation of claims in both directions and allow LBIE to release assets to clients without the need for clients to put up indemnities and collateral, as is required at present. The scheme allows the administrators to deliver certainty of return of assets to trust creditors'

The scheme must, however, win the approval of creditors even if it receives a green light from the court.

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