In the matter of Lehman Brothers International (Europe) (in administration) & Ors
[2022] EWHC 2995 (Ch)
Lehman Brothers (PTG) Ltd (in administration), Re
16 November 2023
[2023] EWHC 3084 (Ch)
High Court
A company in administration since 2008, part of the Lehman Brothers collapse, needed its administration extended. A judge agreed to a two-year extension because there's still a chance of recovering significant money, and winding the company up would be worse. The judge warned that future requests should better demonstrate the financial benefit of continued administration.
Key Facts
- •Lehman Brothers (PTG) Ltd. ('PTG') is in administration since late 2008.
- •Application for a two-year extension of the administration period until 30 November 2025.
- •PTG has been in distribution mode since 24 June 2013.
- •Potential sources of substantial funds remain, including recoveries from Italian liquidation, Eldon Street Holdings Ltd., and statutory interest.
- •Estimated administration costs until conclusion are £700,000.
- •No objections received from creditors.
Legal Principles
The court has discretion to extend administration periods under Schedule B1 para. 76(2)(a) of the Insolvency Act 1986.
Insolvency Act 1986
In distribution mode, liquidation may offer no advantage and present disadvantages, such as loss of group relief and fiscal advantages.
Re Nortel Networks UK Ltd & Ors [2017] EWHC 3299 (Ch); Judge's previous decisions in other Lehman cases ([2016] EWHC 3379 (Ch), [2017] EWHC 3299 (Ch), [2020] EWHC 3449 (Ch) and [2022] EWHC 2995 (Ch)).
Relevant questions when considering administration extension include: (i) why administration is not complete; (ii) suitability of alternative insolvency regimes; (iii) likelihood of extension achieving administration's purpose; and (iv) appropriate extension duration.
Re TPS Investment (UK) Ltd (In Administration) [2020] BCC 437
Outcomes
The administration of PTG is extended until 30 November 2025.
The court found good reasons for the ongoing administration, including the complexity of recovering funds and the potential for substantial recoveries. The potential benefits of continuing the administration outweigh the costs, and no objections were received from creditors. Liquidation was deemed less advantageous.
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