One year on from the Lehman bankruptcy, and the winners are ... the European administrators, who so far have billed £154 million, or to put that in real terms, more than the GDP of Micronesia.
They say that their average hourly rate has dropped from £329 to £309 over the past six months, but I make that over half a million man hours to date.
They say that is equal 0.6 per cent of total assets managed, realised and returned, but 60 bp is a good fee for originating paper, let alone clearing it up. Actually it is worse than that because they have only returned $13.3 billion of collateral to clients, so I make that a fee of 1.73% for the return of collateral, which is expensive by anybody's calculation.
And that is on top of the other overheads paid by the firm while in administration for buildings, computers residual staff and lawyers, who had billed $112m in fees as of September 14. Linklaters said “This is the largest and most complicated bankruptcy in history, raising many novel legal issues”. Sure. We believe you. These were only traded instruments held by a heavily regulated institution.
The administrators are set to run the estate until 2011. So far they have gained control of $40bn of securities and cash and returned $13.3bn in assets to clients. Steven Pearson, a partner at PwC, an administrator of Lehmans in Europe, said there was no indication how much they would recover on the claims and that he expected significant challenges against them. Yeah, sure. After a year's work and £154 million in billings you ought to know to the last penny.
It might help if the administrators' gophers spent less time surfing the web, which I know they do because of the Lehman IP addresses that end up in this blog's viewing statistics.