PwC, administrators of Lehman Brothers Europe (LBIE), the largest and most complex company in the failed Lehman banking group, has said that creditors may now see their claims repaid in full, reports Chartered Accountants Northampton Harris & Co.
The announcement came in PwC’s latest six monthly report, which highlighted what the firm called ‘significant progress’ in the administration. This included the settling of major disputes involving billions of pounds of claims with other Lehman affiliates in the USA, Switzerland and Luxembourg, ending lengthy legal actions. As a result, PwC is reporting higher expected future recoveries and a reduction in the reserve for claims.
Tony Lomas, lead administrator and partner at PwC said this meant ordinary, unsecured creditors had a ‘reasonable chance’ of seeing their claims paid in full, which he described as a ‘significant milestone’.
‘There is still a lot to do before finalising the wind-down but we do expect to pay a second, significant dividend to creditors in the near future, taking us another step towards this new target,’ Lomas said.
Since the start of the wind-down, $13.6bn (£9bn) of client assets have been returned to former clients of LBIE and one of the recent settlements reached by the administrators promises to free up another $9.1bn of assets which should be returned to clients later this year.
In November of last year, a first interim dividend of 25.2% was paid to unsecured creditors. As well as now making plans for a second unsecured dividend, the administrators plan to make a first distribution to LBIE’s client money claimants some time later this month.