THE ADMINISTRATORS of Lehman Brothers in the UK and the US are set to face off in a new row about the details of the former Wall Street giant’s bankruptcy proceedings.
US administrators including KPMG and Alavarez & Marsal want the bankruptcy to be managed in a globally co-ordinated fashion, with all creditors subject to the same procedures.
The court-appointed administrators signed a protocol yesterday that they said should “alleviate both the disruption resulting from these filings as well as the lack of an international governing body with uniform oversight”.
But PricewaterhouseCoopers, the firm handling the administration of Lehman’s UK and European businesses (LBIE), wants the bankruptcy managed according to local rules and the varied interests of creditors.
Tony Lomas, the lead administrator in the UK and Europe for PwC, said the US approach would cause more problems than it would solve.
He said: “A major problem with the proposed protocol is that it is likely to unfairly raise affiliates’ expectations of the level of access and information that it will provide, laying the foundations for potential disputes between parties later in the process.”
He said PwC had already reached satisfactory agreements with interested parties and deemed an international protocol “unnecessary, insufficiently tailored and unacceptably burdensome on LBIE and therefore its creditors generally”.
The row is likely to delay the insolvency proceedings because Lehman’s UK estate held around a third of the roughly $630bn (£395m) in assets owned by the group before it filed for bankruptcy, as well as documents essential to bankruptcy proceedings at European subsidiaries.