Lehman Brothers Holdings Inc. may have gone bankrupt eight weeks ago, but the filing continues to reverberate throughout the financial world and even in some unexpected places
like the National Football League's New York Giants. The latest to join the ranks of the exposed are hedge funds. All those 140,000 failed or reconciled credit derivative swaps trades that PricewaterhouseCoopers is involved in could hit the hedge funds and numerous other Lehman clients next month.
Continue reading below
According to the
Financial Times,
four unnamed U.S. hedge funds are likely to close in mid-December because
they cannot access holdings held at the London arm of Lehman Brothers.
All of the shares and loans cannot be accessed so that PwC can unravel
those CDSs.
According to the article:
The funds made an unsuccessful effort to force the administrators of
Lehman, four PwC partners, to give them details of their assets and how
much they owe to Lehman. The funds are likely to be followed by "numerous" others of the 1,000
former clients of the Lehman prime brokerage, Lehman Brothers
International (Europe), according to PwC. ... The administrators complained to the court that, two months after the
collapse, they were still being hampered by "the refusal of a number of
custodians and others to comply with demands for information".
What's interesting is that earlier this week three hedge funds won a majority of seats on a five-member committee
overseeing the bankruptcy of Lehman Brothers' European business, according to
FinAlternatives. GLG Partners, Oceanwood Capital Management and Ramius Capital will assist receiver
PricewaterhouseCoopers in figuring out who is owed what by Lehman
Brothers International Europe. This article sums up that the assets frozen at Lehman
Brothers International Europe are equivalent to $70 billion. Perhaps PwC's partnership with these funds will aid in speeding up the process.
- Maria Woehr
See story from the Financial TimesSee story from FinAlternatives
