Lehman Bros Europe creditors to receive second dividend

UNSECURED CREDITORS of the European arm of the collapsed investment bank Lehman Brothers are to receive a second interim dividend of 43.3p in the pound, joint PwC administrators have confirmed.

The dividend, which will be paid on 28 June, will see around £3.5bn shared between more than a thousand of Lehman Brothers International (Europe) (LBIE) creditors, who have already received some £2bn in the initial dividend.

The latest round of payments will bring the total recovery so far to 68.5p in the pound, although many more creditors have yet to agree their claims against LBIE but funds have been retained by the administrators to pay the same 68.5% dividend to them when they do so.

A third dividend is to be paid in the future as assets continue to be realised and further claims agreed. In their most recent progress report, the administrators noted that there is the possibility that surplus funds could eventually be available after unsecured creditors are paid in full.

Lead administrator and PwC partner Tony Lomas said: “This very large second dividend is possible because we have been able to resolve a number of multi-billion pound disputes with affiliates, on favourable terms, and to reduce our creditor claims reserves through settlements with a number of major trading counterparties.

“The vast scale, complexity and value of LBIE’s business has resulted in it taking a large team of PwC and Lehman staff more than four years to unlock some of the most difficult issues that have confronted us, but the fruits of that labour are beginning to appear.”

The original PwC partners appointed to LBIE in September 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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