Client Money Update - Client Money Application: Appeal - 26/01/2010

This update concerns the application issued by the Joint Administrators on 1 May 2009 seeking directions from the Court concerning LBIE's obligations in relation to the handling of client money received prior to the time of administration (the "Client Money Application"). Further background to the Client Money Application can be found in earlier updates posted on the PwC Client Money website here.

At the handing down of the Client Money Application judgment on 15 December 2009, six respondents to the application sought and were granted permission to appeal the judgment. Those respondents were Lehman Brothers Inc. ("LBI"), Lehman Brothers Holdings Inc. ("LBHI") and Lehman Brothers Finance AG ("LBF"), CRC Credit Fund Limited ("CRC") (one of the representative respondents for unsegregated client money claimants), and Goldman Sachs GSIP Master Company (Ireland) Limited and Paragon Capital Management Fund Limited (two of the representative respondents for segregated client money claimants). 

Four of the respondents, CRC, LBI, LBF and LBHI filed Appellants' Notices at Court on 15 January 2010. 

Upon consideration of the Appellants' Notices, the Joint Administrators consider that it is appropriate for the general estate of LBIE and clients for whom client money was segregated by LBIE to be represented at the appeal by Hong Leong Bank Berhad and by GLG Investments plc: sub-fund GLG European Equity Fund, respectively.  Pursuant to paragraph 24 of the order made by Mr Justice Briggs on 15 December 2009, these two parties have a pre-emptive costs order in their favour with respect to their costs of so acting.

A date for the appeal has not yet been set but further updates will be provided in due course as the appeal progresses.

The breadth of the issues subject to appeal is such that the appeal will impact on the Joint Administrators' timing of making an interim distribution of client money.

Please direct any questions you may have with respect to the above to clientpositionresponses@lbia-eu.com.