PwC Lehman administrators to return 100% plus interest to creditors

PwC Lehman administrators to return 100% plus interest to creditors

First time ever unsecured creditors to receive 100% return and interest in administration history

PWC ADMINISTRATORS have announced they will return 100% of dividends to creditors of collapsed investment bank Lehman Brothers International Europe (LBIE), this year.

The latest announcement of returns is incredibly rare, most unsecured creditors, such as the taxman and suppliers, usually receive just 1p -25p for every £1 owed.

In a further coup for the administrators, this is one of the first time’s unsecured creditors are likely to receive interest on the debt they are owed.

The administrators said that £5bn in surplus has been recovered and that they hope to make further payments above the 100% to unsecured creditors soon.

Tony Lomas, lead PwC administrator and partner said: “The full repayment represents a remarkable feat, following the collapse of the Lehman group in September 2008.

“The fact that we have been able to pay ordinary unsecured creditors in full, including the return of their Trust Assets and client money, with a significant surplus remaining, highlights the importance of having a healthy level of capital within a firm’s balance sheet.”

However, the administrators also announced they are unable to distribute funds due to ongoing legal disputes over which parties should be paid first. The administrators are due to put together a “consensual solution proposal” which outlines the order of payment as they see fit. They hope the proposal will be agreed and payments can begin being made this year.

According to the most recent creditor report, in September 2013, the PwC fees were 2.3% of assets realised, approximately £714m for the five years they have been in place so far.

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.

Three years ago administrators made a return to creditors with interest following the collapse of a pharmaceutical company Unigreg.

Insolvency practitioners from Neivlle & Co, rescued Unigreg through a sale in mid-2011 paying all creditors in full with interest. The company had about £5.2m in debts.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource