LONDON - The administrators for Lehman Brothers' London-based European subsidiary have filed a court order calling for $8 billion in funds to be returned to the UK, after it was removed to the bank's New York central treasury.
PricewaterhouseCoopers (PwC) has been administrating the bank since it filed for bankruptcy in the US on September 15. PwC says the money is needed to pay creditors, salaries, bills and expenses. A PwC spokesman says the return of the bank's hedge fund prime brokerage assets would take several months to conclude. This follows the Japanese Financial Services Authority's move on September 15 to stop Lehman removing remaining assets from the bank's Japanese unit.
Meanwhile, Peter Fleischer, Detlef Leinberger and senior vice-president for risk control Rainer Hartje at German bank KfW have been suspended, after a failed swap deal with Lehman on the morning of its bankruptcy cost the German bank EUR350 million. KfW reportedly transferred EUR350 million to Lehman just hours before the bank filed for US bankruptcy and more than three hours after Lehman warned of its looming insolvency. Lehman's agreed repayment of $500 million in US dollars was never paid. All three have been suspended prior to clarification of the incident.
More on Regulation
Dealers must simplify if there is "no coherent rationale" to structures
Scrapping of test means investor status will not tip offshore funds into Dodd-Frank regime
Minenna of Italy's market regulator warns of serious unintended consequences
Vickers "surprised" by bank's loss of enthusiasm given its support in 2012
Sign up for Risk.net email alerts
Sponsored video: Elseware
Oxford professor David Vines argues that the carrot is as important as the stick
Sponsored webinar: IBM
Watch highlights of this year's London conference
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.