There’s not much the U.S. can do about the billions of dollars in hedge fund assets frozen due to the Lehman Brothers bankruptcy proceedings in London. But that isn’t stopping one lawmaker from trying to give the U.S. Congress a voice on the other side of the Atlantic.
Rep. Gregory Meeks (D-N.Y.) has introduced a concurrent resolution expressing the “sense of Congress” that Lehman’s “administrators in the United States and United Kingdom should establish an international framework for coordinating bankruptcy proceedings among the business holdings and operations of each company.” The non-binding resolution also calls for the Securities and Exchange Commission to “dedicate sufficient resources to the matter so as to ensure an expedited resolution serving the interest of American investors in an equitable matter.”
Some US$50 billion in hedge fund assets are tied up in the Lehman bankruptcy. Last month, a British judge rejected a proposed settlement that would have returned some $11 billion to their rightful owners quickly. PwC has warned that if no deal can be reached, it could take years for the claims to be resolved. But Steven Pearson and Tony Lomas, the administrators, said they remain confident that a solution can be found.
Meeks blames the personal liability imposed on the administrator by British law for the snail’s pace of returning the prime brokerage assets, and asks that British authorities consider relieving PwC of those liabilities.