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Lehman administrator seeks $8bn | Lehman administrator seeks $8bn |
(about 8 hours later) | |
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. | 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. | 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. | PwC is currently trying to find buyers for various parts of Lehman Europe. |
'No redundancies' | '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. | 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." | "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. | 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. | 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. | "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. | 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. | Lehman's demise sent shock waves through global markets, undermining confidence in the financial system. |
Tighter regulation | 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. | 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." | 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. | 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. | 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. | 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. |