The London High Court yesterday ruled against the speedy recovery of the European assets of the bankrupt banking giant, Lehman Brothers Holding Inc, to its creditors by blocking the new scheme proposed by PricewaterhouseCoopers LLP (PwC), the joint administrators of Lehman Brothers International Europe (LBIE).
The scheme of arrangement, as currently proposed, seeks to modify certain rights of clients whose property is held on trust by LBIE and the judge, William Blackburne ruled that the court has no jurisdiction to sanction the proposed scheme.
The judge, said: ''Given the exceptional problems that the administrators face in dealing with client assets, this is not a conclusion which I am happy to reach. But I must set out the law as I see it, not as I wish it to be.''
Earlier, PwC informed creditors that the process of bilateral negotiations for return of assets is lengthy and tedious as well as lacking finality regarding dealings between LBIE and its customers.
The new scheme involved modification of certain rights of the customers by dividing them into three classes, allowing PwC to deal with each class rather than individual case. Some of LBIE's creditors opposed the scheme.
PwC joint administrator, Steven Pearson said the scheme sought would reduce the waiting period of the LBIE clients before they get their assets back. The judgment is disappointing and would further delay the process of recovery.