Lehman Brothers (PTG) Ltd (in administration), Re
[2023] EWHC 3084 (Ch)
In the matter of Lehman Brothers International (Europe) (in administration) & Ors
25 November 2022
[2022] EWHC 2995 (Ch)
High Court
Seven Lehman Brothers companies needed more time to finish paying back everyone they owed money to because of a big court case and complicated financial issues. One company got its administrator discharged immediately, while another will have to wait a bit longer.
Key Facts
- •Eight Lehman Brothers companies have been in administration for over a decade.
- •Seven companies (Extension Application Companies) sought further extensions to their administrations.
- •Two companies (LB UK RE Holdings Limited and Storm Funding Limited) sought orders fixing the time of their Joint Administrators' discharge from liability.
- •LBIE is pursuing a claim against AG Financial Products Inc. in the New York Supreme Court (AGFP Action).
- •The AGFP Action's outcome significantly impacts LBIE's administration.
- •There are complex intercompany claims between the Lehman entities.
- •Tens of billions of pounds have been realised and distributed through the administration process.
- •The administrators sought extensions ranging from six months to three years.
Legal Principles
The court's discretion under Paragraph 76(2)(a) of Schedule B1 to the Insolvency Act 1986 should be exercised in the interests of creditors, considering whether the administration's purpose is achievable, potential creditor prejudice, and creditor views.
Re Nortel Networks UK Ltd [2017] EWHC 3299 (Ch)
In distributing administrations, maintaining administration is generally preferable to liquidation unless a specific advantage of liquidation is shown.
Re Lehman Brothers International (Europe) [2016] EWHC 3379 (Ch)
The court's usual practice is to fix an administrator's discharge from liability 28 days after the final report is filed.
Re Hellas Telecommunications (Luxembourg) II SCA [2013] 1 BCLC 426
Discharge does not prevent misfeasance claims under Paragraph 75 of Schedule B1, but requires court permission.
Re Angel Group Ltd [2016] 2 BCLC 509
Outcomes
Granted extensions to the administrators' term of office for the seven Extension Application Companies.
The ongoing AGFP Action and complex intercompany claims require continued administration to ensure fair distribution to creditors, avoid potential 'lacuna' problems, and achieve the administration's objectives.
Adjourned the discharge application for LB UK RE Holdings Limited.
Concerns about unexpected delays in finalising arrangements with HMRC and a preference to save costs by dealing with the application later.
Granted discharge from liability for the administrators of Storm Funding Limited.
The administration is substantially complete and the administrators are not aware of any potential claims.
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