Court Tosses Lehman Prime Brokerage Appeal

Nov 11 2009 | 10:27am ET

For the second time, a British court has rejected a plan that could speed the return of prime brokerage assets to Lehman Brothers customers.

The U.K. Court of Appeal rejected an appeal from Lehman Brothers International Europe administrator PricewaterhouseCoopers, upholding a lower court ruling that held it didn’t have the jurisdiction to force the plan on unwilling bondholders.

PwC had argued that a “scheme of arrangement” would help expedite the return of hundreds of millions in prime brokerage assets that have been frozen in the case. The firm’s Steven Pearson said the appeals court ruling “restricts the options available to the administrators for the return of client assets,” but added that PwC would now implement its backup plan, which is a contractual version of a scheme of arrangement that does not require judicial sanction.

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