Lehman administration 'more complex than Enron'

The administration of the European arm of failed investment bank Lehman Brothers International (Europe) will be “10 times as large and more complicated” than dealing with the bankruptcy of the multinational Enron Corporation, administrators said today.

Tony Lomas, of PricewaterhouseCoopers (PwC), was speaking after a meeting of Lehman creditors in Greenwich, south-east London.

The business, which employs 5,000 staff in Britain, went into administration in September when its US parent filed for bankruptcy. The collapse of Lehman Brothers after the US Treasury refused to step in with a bail-out sparked what has been described as the biggest crisis to hit the banking system in a century.

Speaking at a news conference called after the creditors' meeting, administrator Tony Lomas said LBIE's balance sheet exceeded one trillion dollars.

He said: “We wanted to give the creditors today some idea of that so they can understand some of the issues we are dealing with and why we are approaching some of the issues that they have in a certain way.”

Another administrator, Steven Pearson, said: “There are many hundreds of thousands of transactions that need to be looked at and we have explained to the creditors today the issues which have to be addressed as part of the process of understanding the consequences of unwinding these transactions.”

More than 1,000 people attended the meeting and voted to create a creditors’ committee, the make-up of which will be revealed next week.

The whole administration process could take as long as seven years.

The administrators said it involved working with PwC staff around the world and that the job was costing as much as £4m (€4.66m) a week.

Mr Lomas said: “It is going to be an expensive process.”