U.K. Court Rejects Lehman Asset-Return Plan

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U.K. Court Rejects Lehman Asset-Return Plan

Submitted by editor on Fri, 11/06/2009 - 10:46

Former clients of Lehman Brothers' European arm were struck a further blow Friday when the U.K. Court of Appeal rejected an appeal from the bank's administrators to use a bespoke legal tool to expedite the return of $9 billion in client assets, The Wall Street Journal reported. PricewaterhouseCoopers, or PwC, had appealed to the court last month to be granted permission to use a legal tool called a "scheme of arrangement." The tool was designed to speed up the return of assets by dealing with Lehman's clients collectively, rather than negotiating bilateral agreements. Steven Pearson, joint administrator and partner at PwC, said he was disappointed by the ruling. "It restricts the options available to the Administrators for the return of client assets and, in particular, the degree of protection afforded to clients who receive assets back from the company," he said. However, PwC has been working on a "back-up" plan, in case the appeal failed, which Mr. Pearson said will now go ahead. The alternative plan, the full details of which haven't been released, is a contractual solution that has many of the same provisions as the scheme of arrangement, but doesn't require court approval. Read more. (Subscription required.)

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U.K. Court Rejects Lehman Asset-Return Plan

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