Lehman Brothers Hedge Funds

Hedge Funds Fight for Assets in Lehman Brothers

Lehman Brothers International filed for bankruptcy in September and since then its clients have had their accounts frozen. These clients may finally be able to reclaim some of these assets by next year. Several hedge funds, insurance companies and PricewaterhouseCoopers have reached an agreement on the repayment process. When Lehman Brothers collapsed the clients' assets were valued at $23 billion but after nine months the assets are now valued at $32 billion. Many hedge funds have been working to have their assets returned to them.

According to the NY Times:

Numerous hedge funds that used Lehman’s prime brokerage services in London, including Ramius, GLG Partners, Newport Global Opportunities Fund, Amber Capital and Harbinger Capital Partners, have been fighting for months to get their assets back.

RAB Capital shut at least two funds with assets entangled in the wreckage. Ramius, GLG, Legal and General Pensions Ltd., and Oceanwood Global Opportunities Master Fund are leading the creditors group, in addition to Lehman’s bankrupt American holding company.

The complex plan is meant to be a contractual compromise between the trustee and Lehman’s creditors, which number over 1,000, to avoid dealing with disputes on a case-by-case basis that could take years to fully work out. The proposal still needs to be approved by the High Court and at least 75 percent of creditors. Creditors will meet in October to decide on the plan.

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