Lehman UK will pay back every penny it owes
THE BRITISH arm of Lehman Brothers is about to pay back everything it owed when it collapsed in September 2008, and even has a surplus of around £5bn, the bank’s administrator said today.
Unsecured creditors of Lehman Brothers International Europe will be handed 7.8p in the pound by the end of April, taking the total paid out to 100p, in what PwC said was a “remarkable feat”.
“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,” said lead administrator Tony Lomas.
Next month’s return will take LBIE’s total payouts from £9bn to around £10bn. However, some creditors are lobbying the administrator for up to £6.7bn more to compensate them for potential earnings lost while their cash was tied up in the failed bank.
PwC said that because the firm collapsed due to cash flow problems rather than a balance sheet hole, the remains of the company contain an estimated £5bn surplus that could eventually be handed over, depending on the outcome of several legal disputes.
Lehman Brothers Holdings emerged from bankruptcy protection in the United States in 2012 with an ongoing goal to give back $65bn to investors, clients and other creditors before the firm is wound down.