Lehman's London Ghost Office Nears Wind-Down After 12 Years

(Bloomberg) -- Lehman Brothers is finally leaving Canary Wharf, almost a dozen years after the Wall Street giant's collapse.

The bank's European arm, which has been in the hands of administrators since September 2008, now takes up just a corner of the 23rd floor of Citigroup Inc.'s tower on Canada Square in London's eastern financial district. This is where administrators from PwC pick over the last few claims from creditors, and the accountants have given notice that they'll leave the office by June 2020.

The departure is a “significant mark” in the process of finally wrapping up Lehman's legacy, Russell Downs, PwC's joint administrator, said in an interview. A spokeswoman for Citigroup declined to comment.

Fewer than 20 people from PwC are now working to wind up Lehman Brothers International Europe, down from about 750 during the first few years after the financial crisis. They are waiting for the outcome of a handful of legal cases in U.K., U.S. and German courts before the final assets can be released.

According to the latest update, creditors of the European unit have received 26.4 billion pounds ($34.6 billion), and many have been repaid with interest. The American parent bank, meanwhile, continues to make payments to its creditors.

The demise of Lehman Brothers has brought a number of legal firsts, including a ruling in the English Supreme Court this year that led to a tax bill of almost 1 billion pounds on the firm's unexpected surplus. The process has trundled on for so long that one of the PwC team recently reached retirement -- an occasion that required High Court approval before he could leave.

"We've broken new ground in a number of places,” said Downs. “We're hoping that has precedent that will allow other partners to retire without having to go to court.”

Lehman's previous European headquarters was across a square from where the PwC administrators now toil. That tower, 25 Bank Street, is now home to JPMorgan Chase & Co.

--With assistance from Jack Sidders and Donal Griffin.

To contact the reporter on this story: Marion Dakers in London at mdakers@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Keith Campbell, Daniel Taub

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