Lehman Administrator ‘Confident’ Prime Brokerage Freeze Will Thaw

Sep 10 2009 | 10:52am ET

Despite a legal setback, the administrators of Lehman Brothers’ European arm still hopes to expedite the return of billions in frozen prime brokerage assets to the collapsed investment bank’s former clients.

Steven Pearson and Tony Lomas of PricewaterhouseCoopers told The Wall Street Journal that they plan to meet with Lehman’s clients, including hedge funds, today in an effort to find a way to speed the return of their money. If no deal can be reached, PwC has warned it could take years to unfreeze the assets at Lehman Brothers International Europe.

Last month, a British judge rejected the administrators’ bid that could have forced minority dissident claimants to accept PwC’s deal. But Pearson said PwC would appeal that ruling, and that he was hopeful for a compromise.

“We will find a way of expediting the return of assets, of that I am confident,” he told the Journal.

And while Pearson said he disagrees with Justice William Blackburne’s “narrow interpretation” of the law, he and Lomas are working on a plan B to put into place if their appeal should fail. The second plan has not been fully tested, and “will be potentially more time-consuming, more costly and more demanding from an operational perspective” that the rejected plan, “but I am confident we will find a solution.” In addition, PwC is working on something of a plan C, attempting to negotiate deals directly with individual clients.

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