By Dow Jones Business News, September 27, 2013, 12:54:00 PM EDT
By Patrick Fitzgerald
Creditors of Lehman Brothers International Europe, the U.K. arm of collapsed investment bank Lehman Brothers Holdings
Inc., were paid $7.8 billion this week, more than five years after the bank's failure helped spark the global financial
Russell Downs, who's overseeing Lehman's U.K. administration for PricewaterhouseCoopers, said the distribution
represents a full return to the U.K. unit's creditors, mostly hedge funds whose trades got caught up in Lehman's
The payout comes about three months after the U.K. unit's creditors approved a $38 billion settlement with the estate
of Lehman Brothers Inc., the investment bank's U.S. brokerage business.
The distribution "marks the end of a very long campaign that started within weeks of the administration when our
original claim on behalf of our clients was filed against Lehman Brothers Inc., " said Mr. Downs in a statement.
Thursday's $7.8 billion payout to the so-called omnibus trust creditors is in addition to an earlier payment of about
$22 billion plus another $9.5 billion doled out to the U.K. unit's unsecured creditors. The administrator eventually
hopes to return about $64.5 billion to the U.K. arm's creditors.
Lehman's Chapter 11 filing in September 2008 triggered foreign bankruptcy proceedings for more than 80 of the bank's
Lehman's holding company has reached settlements on intercompany claims with virtually all of its foreign affiliates,
including those in the U.K., Japan, Switzerland and Hong Kong, as well as the liquidators of its U.S. broker-dealer.
Some 110,000 individual retail customers of Lehman's U.S. broker-dealer have also received all their money back, $92.3
billion in all.
That unit is being wound down by James Giddens in accordance with the Securities Investor Protection Act. Mr. Giddens
and his U.K. counterparts settled their $38 billion dispute last fall.
The bulk of the Lehman U.S. customer accounts, with assets of more than $40 billion, were transferred to Barclays PLC
( BCS ) after the banks struck a deal in the days following Lehman's bankruptcy filing.
As for Lehman Brothers Holdings' creditors, since its Chapter 11 plan became effective in early 2012, creditors of
Lehman's estate have been paid back nearly $50 billion. That number is expected to grow to more than $80 billion, Lehman
said earlier this summer.
The holding company officially exited Chapter 11 protection in March of last year, but the remains of the company
still exist in the billions of dollars in assets being overseen by a new board of directors.
The team of professionals helping with the holding company's liquidation has raked in $197.7 million since Lehman's
official exit from Chapter 11, according to a bankruptcy court filing Thursday.
The case is expected to continue for several more years as the team sells off Lehman's remaining real estate and
private equity holdings and unwinds its derivative positions.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to
--Joseph Checkler contributed to this article.
-Write to Patrick Fitzgerald at email@example.com
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