Lehman European arm to sue parent for $100 billion
31 August 2009
PricewaterhouseCoopers (PwC), the administrators of Lehman Brothers European arm is planning to claim $100 billion from the bankrupt New York-based bank's parent company as the 22 September deadline nears to file claims in a US court.
When Lehman Brothers filed for bankruptcy protection on 15 September 2008, (See: Lehman Brothers heads for Chapter 11 as Barclays walks away) the once-respected Wall Street institution severed all ties with its overseas subsidiaries.
This led the European arm of Lehman Brothers to seek its claim to the bank's fund like other creditors, who had made claims running into billions. Currently there are 76 different claims filed in courts around the world.
When the bank collapsed last year, Lehman Brothers owed as much as $613 billion as well as held over $30 billion of client assets. The Southern District of New York's bankruptcy court has set 22 September 2009 as the deadline for all creditors to file their claims.
Finance companies and investment funds globally may have to provide around $600 billion in insurance claims on Lehman Brothers' debts and whether those claims are paid or not, the financial repercussions that follow will be the biggest tests for the credit-default swap market.
PricewaterhouseCoopers (PwC) is preparing a claim on behalf of more than 100 former Lehman companies across Europe, most of them based in he UK, mainly for guarantees issued by the parent company to subsidiaries in Europe.