The Lehman Brothers executives in the City who are still surfing for jobs will hardly be amused by the report that accountants and lawyers who are trying to sort out the European collapse of Lehman Brothers have charged more than £100 million in fees in six months. And worse, this is not going to be the end of the bonanza.
PricewaterhouseCoopers (PwC), the administrator, said that costs would continue to accrue at a similar rate over the coming months as a team of nearly 1,500 people scan and unravel “the complex financial web behind the world's biggest bankruptcy”.
Only 800 Lehman employees who were kept to unwind millions of trades between Lehman and other banks and hedge funds were paid £114.8 million by PwC.
Steven Pearson, a PwC partner, was cited saying that Lehman could become the longest British administration, outlasting those of Bank of Credit and Commerce International, which lasted 12 years, and Enron’s UK arm, which collapsed in 2001 and is still in administration.”
A report sent by PwC to the bank’s creditors on Tuesday showed that the accountancy firm had billed £77,233,373 for 234,578 hours of work, an average hourly rate of £329.
The report to creditors also showed that Linklaters, the City law firm, had got £33.5 million in fees between September 14 last year and March 14 this year. The biggest expense is payment by PwC over six months is £34.6 million in rent for the bank’s former headquarters on Bank Street in Canary Wharf, East London. The PwC said that it would keep the Bank Street office open for at least another few months because of the difficulty of moving Lehman’s IT system and data files.