PwC UK earns £420k a day from Lehman Brothers wind-up

According to its annual report to creditors,
the firm has spent more than 250,000 hours on the administration at
an average hourly rate of £302 in the six months to 14 September, a
drop from an average of £329 from the six months to 14 March. The
firm said a drop in the number of senior staff working on the LBIE
project was the reason for the cheaper rate.

Lehman Brothers incurred losses of billions of
dollars in the US mortgage market. It was forced to file for
bankruptcy on 15 September 2008 when US authorities failed to
convince banks to bail out the troubled investment bank. PwC was
swiftly appointed as joint administrators of LBIE.

In the report, PwC said over the past 12
months it gained control of about $40 billion of securities and
cash and returned $13.3 billion of these assets to clients.
Administrators have filed $118 billion worth of gross claims
against Lehman entities in eight countries, as well as $90 billion
of guarantee claims that will soon be lodged.

KPMG Hong Kong is liquidating eight main
Lehman entities registered in Hong Kong, which were responsible for
the bulk of the bank’s non-Japanese operations in the region. The
book value of assets belonging to these entities is in the region
of $20 billion.

Steven Pearson, one of PwC’s four joint
administrators, said administrators were now focusing their efforts
on agreeing claims.

“Our actions have yielded significant
recoveries which, in due course, will be paid to creditors. There
are still some major challenges to address, which we will put
before the UK court,” he said.

On 28 July, the UK High Court reappointed PwC
as joint administrators to LBIE until 30 November 2011.

Nicholas Moody