Failed US investment bank Lehman's European administrators, PricewaterhouseCoopers has filed an 83-page motion in the New York court demanding that $8 billion that Lehman Europe sent to the US be returned to London as it needed to pay salaries to 4,500 employee, property bills, creditors and other day-to-day expenses.
Lehman's 4,500 employees in the UK were rendered jobless after the company had been put into administration when it sought the US Chapter 11 bankruptcy protection. It had become the biggest corporate failure in history.
PricewaterhouseCoopers has questioned why $8 billion was transferred to New York from London just before the bank collapsed.
In the days leading up to Lehman's collapse, the US business took back all the cash held at its overseas subsidiaries. $8.2 billion held by Lehman's offices overseas was sent through London to its headquarters in the US via electronic transfer. (See: Lehman's NY staff to get $2.5 billion bonus; London staff scandalised)
Lehman's European headquarters which is based in London often remitted money from its London HQ to its parent company in New York where the money kept overnight accrued interest and sent back the following morning to London.
On Sunday when Lehman filed for bankruptcy, Lehman Europe found that it was down by $8 billion as the money failed to arrive leaving the employees and creditors high and dry.
Prime Minister Gordon who would be visiting the US on Wednesday said he will push the US to help return $8 billion from failed investment bank Lehman Brothers to its staff in Britain.
Speaking at the Labour's annual conference in Manchester he said, "We are asking and working with the American government to get that money back to pay salaries, not of high-flying financiers, but of cleaners and people who are computer operators who would otherwise be denied their money."
Ironically, Barclays of London agreed to buy Lehman's US investment-banking and capital-markets businesses, securing up to 10,000 US jobs. To top it up, Barclays announced to the American staff that it would pay more than $2.5 billion in bonuses and other remuneration.
All is not lost for the staff at Lehman brothers in the UK as Lehman's administrators secured a £100-million loan against some of Lehman's office buildings whereby the staff can now be paid by next week as long as they continue to report for work.