Lehman Brothers collapsed on September 15 2008. Its principal
European trading entity, Lehman Brothers International Europe (LBIE) was
put into administration in the UK. The commercial fallout from the
collapse of Lehman Brothers is well documented and continues to have an
adverse global impact on not only banks and financial markets, but
economies more generally.
From a legal perspective, the collapse has been no less significant.
Before the collapse of LBIE, the impact of insolvency of a major
investment bank on client assets and money had not been fully factored
into market expectations, either in the UK or elsewhere.
The significant impact this has had in practice, including the
difficulties experienced by the LBIE administrators in returning trust
assets and money to clients under their existing statutory powers,
emphasised the importance of ensuring that client assets and money are
returned promptly following insolvency. A key aspect to this was the...