Client and money assets update- High Court application further information 03/06/09

The purpose of this update is to provide further guidance to clients and creditors to assist them in understanding the issues raised in the High Court application issued on 1^st May 2009 concerning pre-administration client money (the "Application").  A summary of these issues, together with copies of the application notice and supporting witness statements, was set out in the Client Money Update of 18^th May 2009 Client money and assets update - 18/05/2009

On 29^th May 2009, the Joint Administrators wrote to clients for whom LBIE had segregated client money on 12th September 2008 (based on data as at close of business on 11^th September).  The letter provides these clients with a range of how much client money LBIE believes was segregated on their behalf, together with an indication of the reason(s) for segregation.  While the letter was sent only to those clients for whom LBIE had segregated client money on the 12^th September, the issues raised in the Application also concern 'unsegregated' clients (being clients for whom LBIE should have segregated client money but did not) as well as general creditors.

To assist clients and creditors in assessing the potential effect of the Application on them, the Joint Administrators have set out a number of examples of client situations in the document attached below.  For ease of reference, the document sets out each issue in the order set out in the application notice and follows with examples that illustrate that issue.  At the end of each set of examples, the Joint Administrators set out their comments on the issues as well as their current view on them.

While the Joint Administrators have endeavoured to make the document as straightforward as possible, the issues are complex and they cannot be properly addressed without going into some detail. Clients and creditors are reminded that the directions received will, amongst other matters, determine the size of the client money pool and how client entitlements against the pool are calculated. Accordingly, all clients who believe they have client money claims are likely to be affected by how the issues raised in the Application are determined.  Where appropriate, clients and creditors should consider seeking specialist legal advice.

The Joint Administrators would again remind all interested parties that, should they wish to make representations in relation to the Application, they must notify the Joint Administrators by 4pm on 12^th June 2009.  See the Client Money Update of 18^th May 2009 for information on the process to make this notification Client money and assets update - 18/05/2009.

Click here to review examples of client situations and the Joint Administrators' current views .