Lehman Aims To Liquidate $11b Assets

Published: 24-Nov-2009

To return assets to clients in the UK before the end of the first quarter of 2010

The bankruptcy estate of Lehman Brothers Holdings in the UK is planning to launch a proposal to hedge-fund creditors to unfreez approximately $11 billion in assets, reported The Wall Street Journal. The plan comes after a UK court rejected the London-based unit, called Lehman Brothers International Europe's attempt to use a legal tool known as a scheme of arrangement to return client assets.

Daniel Ehrmann, a managing director at turnaround firm Alvarez & Marsal and head of international operations for Lehman's US estate, said: "Under the new proposal, Lehman's UK estate will also have a formal framework to return assets recovered by Lehman's US estate to UK clients. Lehman's estate in the US is extremely supportive of this resolution agreement. As one of [the U.K. estate's] unsecured creditors, we would like to see this claims process expedited."

Reportedly, as per the plan being proposed to about 600 of Lehman's clients in the UK, the bankruptcy estate is expected to return $11 billion in assets before the end of the first quarter of 2010 and close out positions.

However, for the plan to get approval, 90% of the affected clients must support it. Steven Pearson, joint administrator of Lehman's bankruptcy estate in the UK and a partner at PricewaterhouseCoopers, said: "If the plan is rejected, it could take years to ultimately return all client assets," reported the newspaper.

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