PwC seeks court approval for Lehman plan
Administrators apply to court to move forward scheme of arrangement for Lehman creditors
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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