PwC: Client Money Update - Update on Client Money held at Lehman Brothers Bankhaus AG

June 23, 2011

On 22 December 2009, the Joint Administrators filed a petition at the Frankfurt Main Regional Court in Germany, claiming the return of $1 billion plus interest to LBIE by Lehman Brothers Bankhaus AG ("Bankhaus").

This claim was dismissed by the Frankfurt Court. The written judgment denied the existence of a trust relationship between LBIE and Bankhaus and failed to make a judgment on the substance of LBIE's pari passu claim for the client monies, prompting LBIE to appeal. On 18 May 2011, the Joint Administrators attended the Appeal Court hearing. Following this oral hearing the case was referred back to the Court of First Instance with the judgement dated 8 June 2011.

The formal written judgment referred the proceedings back to the Regional Court of Frankfurt am Main but dismissed LBIE's request for further information regarding the whereabouts of the client money, taking the view that sufficient information had already been provided to LBIE. The judgment makes a number of supportive comments regarding LBIE's case but emphasised that the issues needed to be considered in light of the relevant matters of fact. The date for the next court hearing is unlikely to be before September 2011.