Lehman UK arm to sue parent firm

Written by Press Trust of India | London | Updated: Aug 31 2009, 05:45am hrs
The UK arm of Lehman Brothers is preparing a $100-billion claim against its former parent company in the US.

Administrators of the London arm of Lehman Brothers, the Wall Street bank that collapsed a year ago, are preparing a $100 billion claim against its former parent company in America, the Sunday Times has reported. The demand is being finalised by PricewaterhouseCoopers (PwC), Lehmans UK administrator and would be lodged in the next few weeks. The report says the move would mark an acrimonious new stage in the international battles by creditors to recover billions still tied up in the largest corporate collapse in history.

Lehman owed as much as $613 billion when it collapsed in September last year. The US bankruptcy court has set the deadline of September 22 for all creditors to file their claims. Quoting Tony Lomas, one of the partners at PwC leading the case, the report noted that he would file the claim on behalf of more than 100 Lehman units that fall under the London umbrella. On the face of it guaranteed most of the obligations of other subsidiaries so were going to be filing claims in the many tens of billions. It will be close to $100 billion, he was quoted as saying. The publication said the London claim would add to tensions between American and British administrators. John Suckow, president of Lehman Brothers Holdings, the remains of the US parent company and MD at liquidator Alvarez & Marsal, is braced for a deluge of claims, it added.