Lehman Brothers

Lehman Brothers were the fourth largest investment bank, and their collapse was one of the defining moments of the 2008 financial crisis. PwC were appointed as administrators.

100p/£1 returned - £36bn of cash and assets. And a further £7bn surplus.

The largest, most complex and successful insolvency in history. Has involved litigation in the High Court, ten cases before the Court of Appeal, and six hearings before the Supreme Court.

A myriad of new legislation and new powers of intervention built directly from the lessons learned as a result of the Lehman administration. Our partners, staff, legacy Lehman people and specialist advisors have made a significant global impact on subsequent insolvency matters, regulators, central banks and governments.

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Ten years on: How Lehman changed the world

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Significant Achievements

Creditors repaid in full

  • c.£23bn returns to clients of custodied securities, investments and associated cash
  • c.£13bn payments to unsecured creditors on agreed claims

Estimated c.£7bn surplus, of which:

  • c.£7bn post-administration interest
  • Including c.£1bn of withholding tax

Resulting in return of 100p/£ to creditors and estimated total returns to counterparties of c.£43bn

  • 2,400 jobs transferred
  • First multi-billion pound surplus in a UK insolvency


Complex Landscape

  • 6,200 counterparties with live positions
  • 820 bank accounts
  • 750 stock depots
  • 13 overseas branches
  • 17,600 master agreements
  • 60,000 sq feet of infrastructure

Data Haystacks

  • 7,000 servers
  • 500 terabytes of data
  • 100,000 email accounts
  • 50 million user files
  • 75,000 hard copy boxes
  • 2,000 complex financial systems
  • 800,000 pending and failed trades

2,000 PwC partners and staff from 17 business areas, with 500 mobilised in the first week, responding to investigations, discovery motions, litigations, HR matters and regulatory requests.




Implementation Solution lens

PwC provides industry-focused services. Much of the success of the Lehman Administration was due to our ability to immediately bring in specialists we have previously worked with in Assurance, Consulting, Deals, Forensic Services, Legal, People, Risk and Tax. Our experienced staff, combined with our global network, allow us to provide the support you need.


“Unwinding the world's largest and most complex insolvency has required a broad range of skills and expertise. This has only been possible through the hard work and professionalism of the PwC team, Lehman employees, various legal advisers and other stakeholders. At the time of the global financial crisis, few would have imagined the success of the insolvency and the scale of recoveries for creditors, with many receiving payment in full including statutory interest. I'm exceptionally proud to have played a part in helping solve the vast array of issues and enable repayments to be made to so many.”

Ed MacnamaraJoint Administrator


  • Court appointed Administrators at 7.56 am, just before markets opened.
  • LBIE equities business sold to Nomura, transferring and saving 2,400 jobs.
  • c.$40bn securities and cash brought under the Administrator’s control.
  • Client Information Portal launched and Claims Resolution Agreement developed.
  • Legal proceedings started against LBB for return of $1bn of Client Money.
  • c.£10.7bn of Client Assets returned by September 2010, including c.£1.7bn under the Claims Resolution Agreement.
  • Court of Appeal delivers RASCALS judgment in ruling in LBIE’s favour for the majority assets, leading to the release of c.£1.1bn of ring-fenced cash and securities.
  • c.£1.9bn of assets returned to owners as a result of the Administrators resolving duplicated and invalid claims to trust assets.
  • By September 2011, c.£13bn of Client Asset returns and collateral releases.
  • c.£4.2bn of Claims Determination Deeds issued by March 2012, with c. £2.6bn agreed.
  • Small Claims Settlement Offer launched allowing eligible creditors to receive a one off payment of 90% of their agreed claim - an earlier return to 854 creditors and a 30% reduction in the creditor population at a cost of c.£30m.
  • 1st unsecured creditor dividend of 25.2p/£ paid in November 2012 totalling c.£1.6bn.
  • Waterfall Proceedings in UK High Court to seek determination on the ranking of the sub-debt, contribution obligations of the unlimited liability shareholders, and the existence of currency conversion claims.
  • 2nd unsecured creditor dividend of 43.3p/£ paid and further SCSO payments, totalling c.£3.5bn.
  • 3rd unsecured creditor dividend of 23.7p/£ paid totalling c.£2.2bn.
  • By September 2013, c.£19.6bn of House cash realised.
  • 4th unsecured creditor dividend of 7.8p/£ paid in April 2014 totalling c.£0.8bn. All admitted creditors now paid in full leaving a significant surplus.
  • 2nd interim client money distribution paid of 25%.
  • By September 2014, c.£34bn of value returned to counterparties across the House and the Trust Estates.
  • 1,211 Client Money estates (over 90%) agreed and resolved by March 2015.
  • Omnibus Trust final distribution paid in June 2015. In total, over $9bn returned to clients resulting in a cumulative distribution of 110% on clients’ total Best Claim value.
  • Waterfall I Court of Appeal judgment upheld.
  • First unsecured claim certificate issued.
  • LBIE Pension Scheme, protecting employees’ pension entitlements.
  • LBIE Admitted Claims Auction (“LACA”) was launched in April 2016. 453 creditors had sold claims with a value of c.£550m.
  • High Court UK withholding tax judgment of post-administration interest.
  • Waterfall III proceedings to determine a contribution claim against unlimited liability shareholders.
  • By September, 2,853 Senior creditor claims with a value of over £12.3bn admitted.
  • Supreme Court Waterfall I judgment upholding the junior ranking of the Subordinated Debt (c.£1.2bn).
  • Supreme Court found that Currency Conversion Claims (c.£2.5bn) do not exist.
  • UK Court of Appeal decision that Bower v Marris does not apply to the payment of dividends in administrations (c.£1.7bn).
  • A Lock-up Agreement was entered into with the Subordinated Creditor and the Senior Creditor Group in December 2017 committing parties to a consensual settlement and voting for a Surplus Scheme.
  • Settlement reached with BarCap.
  • Scheme of Arrangement approved by creditors and sanctioned by courts in UK and US, allowing for the distribution of the first multi-billion pound surplus in a UK insolvency.
  • The remaining Waterfall litigation was resolved and all related legal proceedings withdrawn.
  • 1st Scheme Distribution of c.£4bn to c.300 counterparties.
  • Holders of Subordinated debt paid.
  • By September 2018, c.£41 billion returned to counterparties, c.£1billion retained for withholding tax and up to £2billion remaining to be resolved.
  • Withholding tax Supreme Court hearing, with c.£1billion in tax paid.
  • Client Money final distribution and closure of estate.
  • Seven Surplus distributions of full Statutory Interest entitlements (“SI”) of c.£41.5m.
  • Withholding tax payments made to HMRC of c.£3.6m and c.£1.1m.
  • Total distributions to 14 September 2019 to the Subordinated Creditor in respect of the Subordinated Debt and associated SI to c.£1,933m.
  • Closure of 25CS and relocation to TW42, with data centre migrated to the cloud.
  • Scheme Creditors paid their full Statutory Interest entitlements to 8% simple interest.
  • Dividend of £100m to LBHI2, holder of preferred equity.
  • Agreement reached with the final certifying creditor and the relevant Surplus distribution was paid, bringing the Certification process to an end.
  • US competent authority tax reclaim approval for $45m.
  • LBIE seeks recoveries into the Administration and has successfully received confirmation that further proofs of debts have been accepted with total value exceeding c.$400m.

Contact us

Ed  Macnamara

Ed Macnamara

Partner, Head of Restructuring, PwC United Kingdom

Tel: +44 (0)7739 873104

Alison Grant

Alison Grant

Director, PwC United Kingdom

Tel: +44 (0)20 7804 7933

David Kelly

David Kelly

Restructuring and Insolvency Partner, UK Head of Insolvency, PwC United Kingdom

Tel: +44 (0)7974 332659

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