Local governments and charities across Australia are set to get some of their money back from collapsed American investment bank Lehman Brothers.
PPB Advisory, the liquidator of Lehman Brothers’ Australian assets, has approved a scheme to recover $US45 million and $A3 million from insurance policies held in the US and Australia.
This means that 320 creditors will receive between 44 cents and 54 cents in the dollar from their investments with Lehman Brothers, which collapsed in 2008, PPB chairman Stephen Parbery said.
Those creditors include a group of 72 councils, charities, churches and private investors who had launched a class action against Lehman Brothers prior to when liquidators were appointed to the bank.
“By settling the insurance policies, we’re now in a very good position to reach a settlement in relation to class action creditors and we’re also in a very good position to now put before the court a way to deal with the other 250 contingent creditors,” he said.
It is PPB’s priority to reach a settlement in that class action so distributions can be made to creditors in early 2014, he said.
The long-running class action was led by Wingecarribee Shire Council, in southern NSW.
Mr Parbery said attempts to settle that case have been problematic due to the risk of jeopardising an insurance recovery.
“The insurance policies might have been voided if we’d actually settled the claim with the class action parties without approval of the insurers,” he said.
“These are very complex matters of working out what are the rights of people that buy products.”