Adminstrators of Lehman Brothers Europe unveil plan to distribute assets to creditors
By APWednesday, June 16, 2010
Administrators unveil plans for Lehman Bros Europe
LONDON — The administrators of Lehman Brothers’ business in Europe said Wednesday they could begin dividing up some 7.3 billion pounds ($10.8 billion) of cash from the failed company early next year if creditors agree to a claims plan.
Administrators from PricewaterhouseCoopers hope to get agreement on a “consensual approach” which will apply the same standards to all claims by unsecured creditors.
The sum cited Wednesday represents about half of the unsecured claims, which PWC estimates are between $18 billion and $22 billion. Unsecured creditors had until Dec. 31 to submit claims.
Lehman Brothers collapsed in September 2008, becoming one of the most prominent casualties of the global credit crisis.
“The consensual approach is entirely dependent upon the willingness of the overwhelming majority of financial trading counterparties to support the process,” said Steven Pearson, one of the joint administrators from PricewaterhouseCoopers.
“In the short term, the joint administrators will be opening a dialogue with a number of financial trading counterparties with regard to their claims and seeking their support in order to establish the feasibility of the proposal.”
In December, PWC announced that it had won support for a separate claim resolution agreement to return more than $11 billion in assets held in trust by Lehman Brothers.
Before that, the administrators say they had returned $13.3 billion to creditors.
In all, PricewaterhouseCoopers says it is dealing with $48.6 billion in Lehman Europe assets.
If the response from unsecured creditors is positive, the administrators say there would be meetings in London and New York to develop a program to be launched in the second half of the year.
“We are optimistic that we can gain significant support to enable this proposal to become a reality,” Pearson said.
“The conventional alternative process to determining claims using our powers under the Insolvency Act is likely to mean the exercise will be expensive and take many years and that cannot be in anybody’s interest.”
