“Creditors to Lehman Brothers International Europe may be repaid in full after administrators settled disputes with some of the failed investment bank’s affiliates, increasing the size of expected future recoveries.
A recent agreement with a Lehman affiliate has freed up an additional $9.1 billion of assets, which will be distributed later this year, according to an e-mailed statement from PriceWaterhouseCoopers LLP. LBIE is planning a second dividend to unsecured creditors, as well as a first distribution to client money claimants this month.
“To be able to advise ordinary unsecured creditors that we now have a reasonable chance of eventually repaying their claims in full, marks a significant milestone,” Tony Lomas, lead administrator at PwC, said in the statement. “We do expect to pay a second, significant dividend to creditors in the near future, taking us another step towards this new target.”
The administrators have already returned 13.6 billion pounds ($20.9 billion) in cash and securities to clients with funds deposited at the defunct brokerage, PwC said in the statement. Lehman International made its first interim distribution to unsecured creditors in November, paying 25.2 pence on the pound, or about 7 billion pounds, for 1,582 claims, PwC said at the time.
Lehman failed in September 2008, filing the biggest bankruptcy in U.S. history, because of too much debt and risky real estate investments, according to an examiner’s report. The former bank is still liquidating and trying to cut claims more than four years after its collapse.
