Lehman Bros Administrator Seeks $8bil

21 09 2008

The European administrators of failed US investment bank Lehman Brothers have filed a court order in New York demanding $8bn (£4.4bn) is returned from the US to London.

A PricewaterhouseCoopers (PwC) spokesman said the money was needed to pay creditors, salaries, property bills and other day-to-day expenses.

Lehman’s European headquarters, where 4,500 staff worked, is based in London.

PwC is currently trying to find buyers for various parts of Lehman Europe.

‘No redundancies’

Before it went into administration last Monday, Lehman Europe frequently transferred money from its London HQ to its parent company in New York, said the BBC’s Joe Lynam.

“The money was usually kept overnight – earning interest – before being sent back to London.”

But, as the bank neared its end last Sunday, that did not happen and Lehman Europe found itself down by $8bn, having formally requested the money earlier in the week, our reporter said.

PwC also said it was hopeful of finding a single buyer of Lehman’s (European) equities group and investment banking businesses, which employ 1000 specialist staff.

“Who ever buys these groups will have to take on staff liabilities,” said Dan Schwarzmann, a PwC administator.

He added that PwC was hopeful that there would be no redundancies in these businesses, but could not rule it out.

Lehman’s demise sent shock waves through global markets, undermining confidence in the financial system.


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