Lehman administrators could make 100% return to creditors

ADMINISTRATORS to Lehman Brothers Europe have revealed that unsecured creditors could receive 100% of their returns.

According to the ninth progress reported published on 12 April by the administrators to the UK arm (LBIE), in the best case scenario unsecured creditors will be repaid in full.

The recalculation comes after the administrators managed to settle several major disputes with the other arms of Lehman Brothers, such as £12.6bn against its US parent company. It is estimated the settlements have resulted in higher than expected future recoveries for claims.

Since the start of the winding up of the investment bank, £13.6bn of client assets have been returned to former LBIE clients including one of the recent settlements which will see creditors receive a further £9.1bn.

In November last year a first interim payment of 25% was made to unsecured creditors.

Tony Lomas, lead administrator and partner at PwC said: “To be able to advise ordinary unsecured creditors that we now have a reasonable chance of eventually repaying their claims in full, marks a significant milestone for the administrators. This would not have been possible without a huge combined PwC and Lehman effort over the past four and a half years.

“The LBIE administration continues to be an extraordinarily large and complex challenge with many very high value disputes still to be resolved with counterparties.”

PwC partners were appointed joint administrators to the UK subsidiary LBIE on 15 September 2008 – the US arm also filed for bankruptcy in early September.

In November 2011, the administrators applied for an extension of the administration for five years. At that point, Tony Lomas, Steven Pearson, Derek Howell, Russell Downs and Paul Copley were appointed administrators.

The original partners appointed to LBIE in 2008 were Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis. 

There are between £14.7bn and £47.9bn of unsecured claims against the collapsed investment bank.

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