Lehman Brothers Limited (in liquidation)
This site provides information regarding the progress of the Liquidation of Lehman Brothers Limited (in members voluntary liquidation) (“LBL”) and will be updated with new information as and when such information becomes available.
Steven Sherry and David Robert Baxendale were appointed as Joint Liquidators of LBL to manage its affairs, business and property as agents without personal liability. The Joint Liquidators are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales.
Timeline
- In 2008, the Administrators of Lehman Brothers Limited (LBL) were appointed and pursued the objective of achieving a better result for creditors than liquidation.
- They also identified and retained key employees, negotiated transitional service agreements with Nomura and Barclays Capital, and established a Creditors' Committee.
- In 2009, the Administrators focused on rationalising the IT infrastructure and applications, resolving intercompany and affiliate balances, securing tax repayments, and managing employee claims and pensions.
- They also obtained an extension of the Administration period to November 2011.
- In 2010, the Administrators completed the migration of applications and data to an independent data centre, outsourced the IT operations, and reduced the dependency on Nomura and Barclays Capital.
- They also agreed a mechanism for allocating tax and tax losses across the Group for the years 2004-2007, which increased the amount of tax repayments due.
- In 2011, the Administrators transferred the responsibility for IT and property to Lehman Brothers International (Europe) (LBIE), and focused on human resources, pensions, corporation tax, VAT, intercompany, and affiliate company relationships.
- They also received a certificate from the Scheme Actuary specifying the amount payable by LBL to the Lehman Brothers Pension Scheme as £119 million.
- In 2012, the Administrators commenced payment of dividends to creditors with preferential unsecured claims, and continued to pursue and recover amounts due from other Lehman Group companies.
- They also finalised the 2011 Group loss position and submitted it to HMRC, and completed the provision of data to LBHI and LB Bankhaus under the bilateral agreements.
- In 2013, the Administrators implemented a formal redundancy process for employees with roles not required beyond July 2013, and finalised the 2012 Performance Award determination and payment.
- They also defended a claim by LBHI for $16 million relating to the sale of the Slough Data Centre, which was listed for hearing in November 2013.
- In 2014, the Administrators of LBL participated in the Waterfall I and II proceedings, which sought to clarify the ranking and quantum of LBIE's liabilities and the potential contribution claims against LBL as a shareholder of LBIE.
- They also finalised the group relief position for corporation tax and received tax repayments of £505m on behalf of the Group.
- In 2015, the Administrators of LBL continued to adjudicate the claims of unsecured creditors and paid a first interim dividend of 1.66p in the £ to unsecured creditors.
- They also engaged in the Waterfall III proceedings, which addressed the entitlement and calculation of statutory interest for creditors of LBIE and LBL.
- In 2016, the Administrators of LBL received the judgement of the Supreme Court in the Waterfall I proceedings, which confirmed that statutory interest was payable to creditors of LBIE and LBL at the non-compound rate of 8% per annum.
- They also settled the Waterfall III proceedings, which enabled LBL to declare a second interim dividend of 98.34p in the £ to unsecured creditors and a first interim dividend of 77.44p in the £ to subordinated creditors.
- In 2017, the Administrators of LBL received the judgement of the Court of Appeal in the Waterfall II proceedings, which determined the ranking of subordinated debt in LBHI2 and the availability of foreign currency conversion claims for creditors of LBIE and LBL.
- They also declared an interim distribution of 31.4% of preferential, unsecured and subordinated creditors' respective entitlements to statutory interest.
- In 2018, the Administrators of LBL participated in a coordinated declaration of distributions and dividends by a number of Lehman Group entities, enabling LBH Plc to pay an additional dividend of 18p/£ on LBL's claim for £709m.
- They also finalised the LBL pension position with the pension Trustee.
- In 2019, the Administrators of LBL continued to pursue and recover intercompany balances and to review and adjudicate outstanding unsecured claims.
- They also paid a second distribution of 22.56p in the £ to subordinated creditors ranking ahead of statutory interest, bringing the total distributed to this class of creditor to 100p in the £.
- In 2020, the Administrators of LBL continued to monitor the impact of the COVID-19 pandemic on the investment and treasury activities of LBL and to liaise with HMRC on various tax matters.
- They also prepared and filed an application to the Court for a further extension of the Administration period to 30 November 2022
- In 2021, the Joint Administrators of LBL paid the final distribution of Statutory Interest to preferential and unsecured creditors, bringing the cumulative amount paid to 100%.
- They also settled the Clawback litigation with LBHI, which enabled further payments of Statutory Interest to certain affiliate creditors who agreed to subordinate their claims.
- In 2022, the Joint Administrators received a further payment of Statutory Interest from LBH Plc, LBL's largest debtor, after the Supreme Court refused leave to appeal the Court of Appeal's decision on the ranking of subordinated claims in LBHI2.
- They also applied to the Court for a further extension of the Administration period, as they continued to explore potential mechanisms to accelerate the payment of further distributions to creditors and closure of the estates of LBL and other Lehman UK entities.
- In 2023, the Joint Administrators received a repayment of VAT from HMRC after resolving an open enquiry relating to a liability to PAYE and Employers' National Insurance.
- They also adjudicated and paid HMRC's claim for Inheritance Tax arising from the Employment Benefit Trusts, which was reduced from c.£8m to £667k after extensive searches and mediation.
Contacts
- All queries to the Administrators of LBL should be sent to: uk_lbl_enquiries@pwc.com
Steven Sherry and David Baxendale have been appointed as Joint Liquidators of Lehman Brothers Limited to manage its affairs, business and property as its agents and without personal liability. Both are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The Joint Liquidators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics
The Joint Liquidators are controllers of personal data as defined by the Data Protection Act 2018. PricewaterhouseCoopers LLP will act as processor on their instructions. Personal data will be kept secure and processed only for matters relating to the Members' Voluntary Liquidation.
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