PwC earns £77m from Lehman

PwC has earned more than £77m for sifting through the remains of Lehman Brothers' European arm, one of the biggest casualties of the financial crisis.

PwC issued a 90-page creditors report late last night, detailing its fees and the progress it had made.

Since being appointed last September, partners, directors and associates have worked 234,578 hours, earning the firm £77.2m.

Between 14 March and 14 April, the firm made £4.9m for working on the high-profile case, widely regarded as one of the most complex administrations in history. At one stage there were more than 500 PwC staff employed on the insolvency.

Led by joint administrators Tony Lomas, Steve Pearson, Dan Schwarzmann and Mike Jervis, PwC has so far managed to recover $8.7bn of assets and gained control of over £35bn in securities after being called in to take control of the Lehman Brothers' European division last September.

Pearson said: 'The collapse of Lehman Brothers last September was one of the defining moments of the current economic and financial crisis and we stated at the time that the administration of Lehman Brothers International (Europe) would be an exceptionally complex task.

'In the last six months, we have been working to implement a structure which will maximise recoveries and enable claims to be agreed. This has now been achieved and results are coming through. Returning assets to clients remains a key priority.'

PwC said it is now in a position to make more headway after hammering out a scheme of arrangement at the High Court. This will enable PwC to put creditors owed similar amounts of money in groups, making the task of returning assets easier.

However, unsecured creditors may be in for a long wait before they see any returns.

PwC said: 'Over the coming months, the Administrators intend to explore the alternative mechanisms for distributing realisations to unsecured creditors. We caution, however, that it is likely to be some time before a dividend is paid
to unsecured creditors.'

Pearson said: 'The task continues to be challenging and we are working closely with regulators, institutions and counterparties amongst other stakeholders to ensure the best outcome.'

The next progress report to creditors is due to be published in six months' time, PwC added.