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£40bn return for creditors of Lehman Brothers 16 September 2013

Creditors of collapsed bank Lehman Brothers are to set to recover “100% of their claims” in early 2014, according to administrators.

Approximately 3,400 creditors of Lehman Brothers International Europe’s (LBIE) UK and European operations are in line for a £40bn pay-out five years after the bank’s failure heralded the start of a global economic crisis.

Tony Lomas, joint administrator and partner at PricewaterhouseCoopers, said: “Given the sums involved and the huge complexity of the task, we are extremely pleased with the progress that we have made, and with our prospects of breaking the back of many of the remaining big issues over the next year or so.

“We have already paid 68.5p in the pound to LBIE’s unsecured creditors and it looks likely that the eventual return will be 100p, plus the possibility of some interest.

“The exact amount of interest payable will depend on the outcome of an autumn UK High Court case which will decide whether unsecured creditors’ rights to interest come before a £1.3bn debt claim filed by one of LBIE’s shareholders, LBHI2.”

A report from administrators in March this year estimated a high-case outcome of 116.2p in the pound for unsecured creditors.

An updated report due later this month (September) is expected to reflect “further progress”, with the return of another £6bn of Trust Assets to clients later this month, bringing the total to £21bn since the start of the administration.

A total of 2,100 unsecured creditor claims totalling £9bn have now been admitted to the LBIE estate and another 1,300 claims worth £7.5bn have been filed but remain to be agreed.

Lomas said: “We are some way from finishing the task but we have made a great deal of progress and have a clearer view of the future than ever before.”

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