Lehman Brothers International Europe (LBIE) can begin returning $11bn of frozen hedge fund assets trapped in the bank after reaching Claim Resolution Agreement (CRA) with more than 90% of affected clients, reported the Financial Times.
The CRA is a multilateral contract between LBIE and its clients which governs the basis on which assets can be returned. It is developed in close consultation with the LBIE creditors’ committee members, becomes effective between LBIE and the CRA signatories with immediate effect.
Reportedly, the mechanism divides clients’ claims into four categories and facilitates the valuation and settlement of disputes over claims.
Steven Pearson, Joint Administrator, said: “I am delighted that we have received overwhelming support for this arrangement to return assets to clients. The CRA now provides an agreed basis on which to systematically settle clients’ claims and reunite them with their assets.
“The implementation of the CRA illustrates the flexibility afforded to myself and my fellow LBIE Administrators under UK insolvency law and, in particular, the ability to develop practical solutions in consultation with the market.”
