Page last updated at 13:25 GMT, Sunday, 21 September 2008 14:25 UK

Lehman administrator seeks $8bn

Lehman Brothers UK staff packing up
Lehman's administrators want to repatriate $8bn from the US

The European administrators of failed US investment bank Lehman Brothers have filed a court order in New York demanding $8bn (4.4bn) be returned from the US to London.

A PricewaterhouseCoopers (PwC) spokesman said the money was needed to pay creditors, salaries, property bills and other day-to-day expenses.

Lehman's European headquarters, where 4,500 staff worked, is based in London.

PwC is currently trying to find buyers for various parts of Lehman Europe.

'No redundancies'

Before it went into administration last Monday, Lehman Europe frequently transferred money from its London HQ to its parent company in New York, said the BBC's Joe Lynam.

"The money was usually kept overnight - earning interest - before being sent back to London."

But, as the bank neared its end last Sunday, that did not happen and Lehman Europe found itself down by $8bn, having formally requested the money earlier in the week, our reporter said.

PwC also said it was hopeful of finding a single buyer of Lehman's (European) equities group and investment banking businesses, which employ 1000 specialist staff.

"Who ever buys these groups will have to take on staff liabilities," said Dan Schwarzmann, a PwC administator.

He added that PwC was hopeful that there would be no redundancies in these businesses, but could not rule it out.

Lehman's demise sent shock waves through global markets, undermining confidence in the financial system.

Tighter regulation

The UK prime minister said that international regulation of the financial system must be brought up to date in the wake of the recent turmoil.

Gordon Brown told the BBC: "We're in a new economy, a global financial economy, the world is changing very fast, but the governance of the global financial system has not caught up with it and that's what's got to change."

The global financial impact of the demise of Lehman Brothers is still emerging as firms worldwide state their degree of exposure to the bankrupt firm.

In Hong Kong, angry investors marched to government offices on Sunday calling for action after losing money on investments linked to the failed investment giant.

Last week, UK bank Barclays snapped up some of the core assets of the Wall Street giant, including its New York headquarters, for $1.75bn.




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