Ashurst advises CarVal on Lehman's £100m salary lifeline" />Ashurst has advised the lender on a £100m emergency loan that will ensure the London staff of Lehman Brothers get paid at the end of September.
The firm advised finance house CarVal Investors on the loan facility to Lehman administrator PricewaterhouseCoopers (PwC). The loan enabled PwC to continue paying salaries to all employees still reporting for work at the UK Lehman entities in administration.
The deal brought an end to fears that 4,500 UK Lehman employees, including around 70 in-house lawyers, would not get paid.
Sources told The Lawyer that legal staff will be vital to the winding up of the business and that they will therefore be among the last employees to leave the office.
Ashurst is one of Lehman’s seven panel firms, alongside Linklaters.
The latter bagged the lion’s share of UK work in acting for PwC in what is set to be a £20m job (The Lawyer, 22 September). The CarVal loan was Ashurst’s second Lehman-related instruction.
The firm is also advising several independent business arms of Lehman that are not under administration and are therefore up for grabs for potential bidders. This work is understood to have conflicted Ashurst out of acting for the Financial Services Authority, which is being advised by Lovells’ insolvency team instead (The Lawyer, 22 September).
Lehman’s New York staff are to receive a bonus payment of $2.5bn (£1.35bn), while the London office is unable to pay any expenses.
Before Lehman’s collapse, its London office transferred all operating cash to Lehman in New York, where the money would accrue interest overnight.
PwC has now filed a New York court order for Lehman’s New York arm to return $8bn (£4.33bn) in cash, which is needed to continue paying UK staff and other expenses.