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Lehman Brothers Limited – In Administration Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018
10 April 2018
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | Contents
Contents Section 1 Purpose of the Joint Administrators’ progress report 1
Section 2 Joint Administrators’ actions to date 2
2.1 Intercompany balances 3
2.2 Waterfall proceedings 4
2.3 Creditor claims and dividend prospects 5
2.4 Tax planning and compliance 6
Section 3 Statutory and other information 7
Section 4 Joint Administrators’ remuneration and other matters 8
Section 5 Analysis of the Joint Administrators’ time costs 10
Section 6 Legal and other professionals 14
Section 7 Receipts and payments to 14 March 2018 15
Section 8 Statement of expenses 16
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | 1
Introduction
This is the 19th progress report prepared by the Joint Administrators (the “Administrators”) of Lehman Brothers Limited (“LBL” or the “Company”).
This report provides an update on the work that the Administrators have undertaken, with particular focus on the progress between 15 September 2017 and 14 March 2018 (the “reporting period”).
Objectives of the Administration
The Administrators are pursuing the objective of achieving a better result for LBL’s creditors as a whole than would be likely if LBL were wound up (without first being in Administration).
The specific aims of this Administration have included:
● Realise all assets of LBL, where value may exist;
● Provide ongoing employee and infrastructure
support to the Lehman Brothers Group of
companies (the “Group”) that are in
Administration in exchange for appropriate
reimbursement;
● Mitigate, so far as possible, any further
liabilities against LBL by the transfer or
termination of contracts; and
● Adjudicate the claims of creditors and pay
distributions to creditors with admitted claims.
Creditors’ Committee
The Administrators regularly meet with the Creditors’ Committee (the “Committee”) to explain how key aspects of the Administration are being dealt with and to consult with the Committee on critical issues.
To date, the Administrators have held 27 meetings with the Committee. The next meeting is yet to be formally confirmed, but is planned to be held in June 2018.
Outcome for unsecured creditors
Creditors will recall that before the commencement of this reporting period the Administrators had paid:
● a dividend of 100p in the £ to former employees
on admitted preferential claims (comprising
claims for unpaid wages and holiday pay);
● two dividends totalling 100p in the £ on
admitted ordinary unsecured claims; and
● a first interim dividend of 77.44p in the £ on
admitted subordinated claims.
The Administrators expect to pay a second interim dividend of 22.56p in the £ to subordinated creditors shortly but are at present unable to estimate the likely timing or quantum of any payments in respect of post-Administration, statutory interest.
Future reports
The Administrators will circulate their next report to creditors in approximately six months.
Signed:
MJA Jervis Joint Administrator Lehman Brothers Limited MJA Jervis and Z Hussain were appointed as Joint Administrators of Lehman Brothers Limited to manage its affairs, business and property as agents without personal liability. MJA Jervis and Z Hussain are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The Joint Administrators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics. The Joint Administrators are Data Controllers of personal data as defined by the Data Protection Act 1998. PricewaterhouseCoopers LLP will act as Data Processor on their instructions. Personal data will be kept secure and processed only for matters relating to the Administration.
Section 1 Purpose of the Joint Administrators’ progress report
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | 2
Creditors will be aware that before the Administration, LBL held most of the UK service and employee contracts on behalf of the Group, and provided all HR, IT, property, accounting and other services for the Group in the UK and Europe.
Following the Administrators’ appointment, LBL continued to provide services to the other UK based Lehman Brothers Companies that are in Administration (the “Lehman Administration Companies”). On 31 May 2013, the Administrators agreed with Lehman Brothers International (Europe) (“LBIE”) and other Lehman Administration Companies to transfer to LBIE the then continuing services and the 400 retained employees.
Throughout the Administration the Administrators have utilised specialist teams from their firm PricewaterhouseCoopers LLP (“PwC”), who have worked with retained LBL and latterly LBIE employees to ensure that LBL’s operations are properly coordinated and the objectives of the Administration are met.
As at the date of the Administration, LBL’s primary assets included inter-company receivables, tax refunds, IT assets and fixtures & fittings. The management and realisation of these assets have been undertaken by separate workstream teams (e.g. the Intercompany team) to maximise the outcome for LBL’s creditors as a whole. In the period, teams have been assembled as necessary to support the Waterfall litigation process.
Key progress from 15 September 2017 to 14 March 2018 includes:
● Judgment of the Court of Appeal in the
Waterfall II proceedings;
● Continued adjudication of claims of ordinary
unsecured creditors and payment of further
catch-up dividends of £63k and the re-issue of
returned dividends of £2.1m;
● Continued pursuit and recovery of amounts due
to LBL from other Group companies, including
a review of the ranking of subordinated debt in
Lehman Brothers Intermediate Holdings 2 Ltd
(“LBHI2”), which may materially impact
realisations in LBL’s major debtor, Lehman
Brothers Holdings Plc (“LBH Plc”); and
● Finalising the LBL pension position with the
pension Trustee.
Receipts and payments account
The receipts and payments account at Section 7 shows cash held increasing by £4.4m to £142.1m in the reporting period. Key movements include:
● Intercompany debtor recoveries of c. £4.5m;
● VAT of c.£8m recovered in LBL’s capacity as the
representative member of the VAT group;
● Accounting to other Lehman Administration
Companies for VAT refunds of c. £4m; and
● Payment for Lehman Administration Companies
tax losses of c. £2.4m.
As set out in earlier Progress Reports, all of the Company’s assets are uncharged, there being no secured creditors.
The receipts and payments account does not show estimated to realise values from the directors’ statement of affairs as this would not provide a meaningful comparison with actual asset recoveries. Given the nature of the Company’s assets and ongoing realisations, the Administrators are not in a position to provide an estimate of the final outcome for creditors.
Statement of expenses
A statement of expenses incurred in the reporting period and an estimate of future expenses is set out at Section 8.
Investigations and actions
No matters have come to the Administrators’
attention during the period under review to suggest
that they need to do any further work pursuant to
their duties under the Company Directors’
Disqualification Act 1986 and Statement of
Insolvency Practice No.2.
Section 2 Joint Administrators’ actions to date
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | 3
Overview
As set out in previous reports, the global nature of the Lehman business, with highly integrated trading and non-trading relationships across the Group, led to a complex series of intercompany positions at the date of Administration. These included 289 debtor and creditor balances between LBL and the rest of the Group, representing at book value £1.2bn of receivables and £0.7bn of payables. Of these, c. £1.1bn (>90%) of receivables relate to five relationships. In addition, LBL held guarantees from Lehman Brothers Holdings Inc (“LBHI”) in respect of claims against some other Group companies.
As a service company, LBL recharged to other Group companies the costs it incurred in the provision of services. In excess of 95% of such costs were charged to either LBIE or Lehman Brothers Europe Limited (“LBEL”).
Progress
The Intercompany team has continued to make progress in the agreement and recovery of a number of significant receivable balances such that these amounts can ultimately be made available to LBL’s unsecured creditors.
As you may recall from the previous report, the Waterfall III settlement provided that the final account balance between LBL and LBIE, and LBL and LBEL, were to be agreed at nil and £282.2m respectively.
To date LBEL has paid dividends of 100p in the £ to its unsecured creditors, whose claims have been admitted, and following the Waterfall III settlement, has paid both statutory interest to its creditors and a surplus to its shareholder, LBH Plc.
LBL is the largest creditor of LBH Plc by value, with an admitted claim of £709m. As previously advised, as part of the Waterfall III settlement, LBH Plc declared a further interim dividend to its creditors, including LBL, which received £446.4m. This brought the total amount it has paid to date to 69.04p in the £.
Material developments in the period include:
As creditors are aware, a Plan of Reorganisation of LBHI and the other Affiliates in US Chapter 11 proceedings became effective on 6 March 2012. Distributions of $6.1m were received in the reporting period. The total recovery from these claims remains uncertain with the
most recent distribution during the reporting period received on 7 December 2017. A further receipt of $1.4m was received following the end of the reporting period, this is not included in the receipts and payments account at Section 7 as this was received on 6 April 2018;
£500k was received from the estate of Lehman Brothers Japan by way of a sixteenth interim distribution; and
A number of smaller recoveries have been received from group companies in a variety of jurisdictions, and further recoveries are anticipated.
The Intercompany team continues to proactively progress approximately 20 other Group balances where there remains a reasonable prospect of future realisations.
The claim in LBHI is in the form of a guarantee of the liabilities to LBL of the claims of certain other Lehman Brothers companies, including LBH Plc. The allowed claim is subject to a “clawback” arrangement, such that LBL would not recover in aggregate more than the value of its claims in the guaranteed entities. It is agreed that the clawback mechanism has not yet been triggered. Depending on future realisations in LBL, it may be necessary to engage with LBHI to agree the level of recoveries at which the clawback will operate.
2.1 Intercompany balances
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | 4
The “Waterfall” proceedings generally relate to the quantum and ranking of claims in the estates of a number of the UK Lehman companies.
The Waterfall I application concluded on 17 May 2017, on which day the Supreme Court handed down judgment.
As previously reported, LBL was successful in four of five issues, the fifth having no economic significance as a consequence of the effect of the other issues.
Also as previously reported, the Waterfall I judgment formed the basis of a settlement of the Waterfall III proceedings, implemented in September 2017 and as a consequence of which LBL has paid a dividend of 100p in the £ on admitted claims to its ordinary unsecured creditors.
“Waterfall II” application
The Administrators of LBIE made another application to the Court (the “Waterfall II” application) for directions in relation to a number of questions relating principally to the nature and quantum of LBIE’s liabilities.
The issues have been separated into three parts and a separate procedural timetable and trial for each part was agreed. The Administrators of LBL closely monitored the Waterfall II proceedings to ensure all reasonable arguments favourable to LBL’s position were made to the Court, reserving the right to apply to be heard if it appeared arguments that ought to be made were not being made. Following a decision of the Court of Appeal in October 2017 we understand the parties, principally LBIE and certain of its creditors, have agreed to discontinue the Waterfall II proceedings as part of a broader settlement which it is contemplated will enable LBIE to distribute a large part of the surplus funds which it currently holds. The settlement is understood to remain subject to final ratification.
Subordinated claims in LBHI2
LBL is the major unsecured creditor of LBH Plc, with a claim for £709m (approximately 67% of all non-subordinated unsecured claims in LBH Plc). To date, LBH Plc has paid dividends of 69.04p in the £.
LBH plc has a number of assets which it has yet to realise, the largest of which is a subordinated claim in LBHI2.
It is anticipated that the LBIE settlement described above may result in LBHI2 receiving material additional funds in due course, such that it would be
in a position to pay distributions to its creditors with subordinated claims.
In addition to the subordinated claim from LBH Plc described above, there is another material subordinated liability in LBHI2. It is unclear whether the two subordinated claims rank equally (pari passu), or if one or the other ranks first. The answer to that question is likely to have a material impact on realisations in LBH Plc and in turn, in LBL as the major unsecured creditor of LBH Plc.
The Administrators of LBHI2 have issued an application to the High Court for directions in relation to the ranking of the two subordinated claims. There is a similar issue in LBH Plc, and the Administrators of LBH Plc have likewise issued an application to the Court for directions. LBL’s claim in LBH Plc is senior to the subordinated claims in LBH Plc and hence that application is not relevant to LBL.
In the course of the Waterfall III litigation, a very large number of documents were extracted from the Lehman archives and assembled into searchable form. This material included documents potentially relevant to the ranking of subordinated claims in LBHI2. Accordingly arrangements were made for the documents to be made available and searched, using specialist forensic resources.
The Administrators have engaged extensively with solicitors and Counsel to ascertain how best to approach the application for directions, the principle objective being to ensure that all arguments that could be made in favour of LBL’s position were made to the Court. The Administrators have also engaged with the Administrators of LBH Plc and LBHI2, and also with LBHI which has a material financial interest in the outcome of the subordination questions.
2.2 Waterfall proceedings
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | 5
Preferential creditors As creditors are aware from previous reports, a dividend of 100p in the £ has been paid to preferential creditors whose claims have been admitted.
Unsecured creditors Creditors are also aware from previous reports that the following interim dividends have been paid to ordinary unsecured creditors whose claims have been admitted:
● a first interim dividend of 1.66p in the £ was declared and paid in December 2014; and
● a second interim dividend of 98.34p in the
£ was declared and paid in September 2017. Following the payment of dividends totalling 100p in the £ to ordinary unsecured creditors, a first interim dividend of 77.44p in the £ was declared and paid to subordinated creditors.
Claims agreement Unsecured claims as at 14 March 2018 can be summarised as follows*:
£m
Received 214.4
Less: Admitted (181.0)
Less: Rejected (16.0)
Balance under review
17.4
* Excludes claims from LBIE, LBEL and LBHI2 impacted by the outcome of Waterfall III. These claims have been agreed at nil, £282.2m and £257.2m respectively.
Any creditor who has yet to submit their claim should do so as soon as possible. Further information is available at:
http://www.pwc.co.uk/services/business-recovery/administrations/lehman/lbl-in-
administration.html
Claims and supporting documentation can be submitted via email to [email protected]
Claims under review
Work has continued to review 11 claims totalling £17.4m. The Administrators expect to have adjudicated the majority of the remaining claims shortly.
Employee claims The Administrators have continued to correspond with a small number of former employees regarding the adjudication of their claims. The Administrators have also written to nine former employees with outstanding Employment Tribunal (‘ET’) claims who have not responded to previous correspondence, requesting that these are withdrawn and substituted with a claim in the Administration where appropriate. One former employee subsequently withdrew their claim and another has claimed in the Administration. The remaining seven former employees have not responded and so the Administrators are following legal advice in applying to strike out these ET claims.
Catch up dividends
It is the Administrators’ policy to make periodic catch up dividend payments to creditors when further claims are agreed. During the reporting period, further catch-up dividends of £63k have been paid, along with re-issued dividends of £2.1m. The level of newly adjudicated claims will be kept under review and further catch up dividends paid at such a time as it is economically viable to do so.
Claim reserves and dividend prospects The Administrators continue to reserve for claims not yet finalised. Reserves previously held in respect of intercompany claims from LBIE, LBEL and LBHI2 have been released following agreement of those claims in the Waterfall III settlement. The quantum and timing of any payments in respect of post-Administration, statutory interest are currently uncertain and will depend on progress in addressing claims reserved for, payment of the balance of claims of subordinated creditors and additional realisations principally from LBL’s claim in LBH Plc.
Issues and priorities
The Administrators’ priorities in relation to creditor claims for the next six months are to continue to review and adjudicate outstanding unsecured claims, including dealing with any new claims received, and pay catch up dividends on agreed claims.
2.3 Creditor claims and dividend prospects
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | 6
Overview
Prior to entering Administration, LBL coordinated the Group corporate tax, VAT and PAYE affairs. Since Administration, this role has diminished but LBL continues to act as representative member of the Lehman VAT group and coordinates the historic Group loss allocation for corporation tax purposes.
Progress
Specific progress in the reporting period includes:
Corporation Tax
Finalising and submission of the 2016 tax return.
Providing tax advice and support in relation to the Waterfall III application.
Compliance with the Administrators’ responsibilities under Senior Accounting Officer (“SAO”) legislation.
Adherance to the UK and US Foreign Account
Tax Compliance Act (“FATCA”) and Common Reporting Standards (“CRS”).
VAT
All group VAT returns have been submitted up to, and including, the quarter ended November 2017.
Since the last report to creditors, LBL has received repayments from HMRC for the May 2017, August 2017 and November 2017 quarters totalling c. £7.5m. LBL has also received c. £0.5m as VAT group representative from other VAT group members to meet their respective VAT liabilities.
PAYE and other employment taxes
The Trustees have contacted the remaining five
former Lehman employees who are
beneficiaries to the Lehman Brothers
Employment Benefit Trust (“EBT”) in order to
finalise open issues and pursue potential
settlement of the EBT PAYE liabilities. None of
the former employees have taken up the HMRC
offer of settlement.
Ongoing discussions with HMRC regarding the
agreement of HMRC’s unsecured claim, seeking
a way forward regarding closure of EBT and
finalising the tax treatment of former employee
dividend payments.
Future work
Over the next six months, the tax team’s work will include:
● Finalising and submitting the corporate tax
return to 31 May 2017 taking into account recent
changes to tax legislation;
● Drafting the group relief agreement for 2016;
● Ongoing discussion with HMRC regarding the
agreement of HMRCs unsecured claim, seeking
a way forward regarding closure of EBT and
finalising the tax treatment of former employee
dividend payments;
● Complying with SAO, FATCA and CRS as
required; and
● Preparation of the VAT returns for the quarters
ending February 2018, May 2018 and August
2018.
2.4 Tax planning and compliance
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 | 7
Section 3 Statutory and other information
Court details for the Administration:
High Court of Justice, Chancery Division, Companies Court - Case 7945 of 2008
Full name: Lehman Brothers Limited
Trading name: Lehman Brothers Limited
Registered number: 846922
Registered address: 7 More London Riverside, London, SE1 2RT
Date of the Administration appointment:
15 September 2008
Administrators’ names and addresses:
MJA Jervis and Z Hussain, of PricewaterhouseCoopers LLP, 7 More London Riverside, SE1 2RT
Changes in Administrator: Z Hussain replaced D Schwarzman, AV Lomas, S Pearson and G Parr on 1 June 2016
Appointer’s / applicants’ name and address:
High Court of Justice, Chancery Division, Companies Court on the application of the directors of the Company, 25 Bank Street, London, E14 5LE.
Division of the Administrators’ responsibilities:
In relation to paragraph 100(2) Sch.B1 IA86, during the period for which the Administration is in force, any act required or authorised under any enactment to be done by either or all of the Joint Administrators may be done by any or one or more of the persons for the time being holding that office.
Details of any extensions of the initial period of appointment:
The Court has granted five successive extensions to the Administration to: 30 November 2011; 30 November 2013; 30 November 2014; 30 November 2016; and 30 November 2020.
Estimated dividend for unsecured creditors:
An Order was granted giving the Joint Administrators leave to pay distributions to (non-preferential) unsecured creditors of LBL.
The Administrators declared and paid a first interim dividend of 1.66p in the £ to ordinary unsecured creditors on 15 December 2014, and declared on 6 September 2017 and paid shortly thereafter a second interim dividend of 98.34p to ordinary unsecured creditors.
Following the payment of dividends totalling 100p in the £ to ordinary unsecured creditors, a first interim dividend of 77.44p in the £ was declared and paid to subordinated creditors.
The Administrators expect to pay a second interim dividend to subordinated creditors shortly but are at present unable to estimate the likely timing or quantum of any payments in respect of post-Administration, statutory interest.
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 8
Background
In this case, the Committee is responsible for agreeing the basis and quantum of the Administrators’ remuneration.
The Insolvency Rules (“IR16”)
There are three alternative fee bases under IR16, either or combination of:
A percentage of the value of the property with which the administrator has to deal.
By reference to the time properly given by the administrator and his staff in attending to matters arising in the administration.
As a set amount.
IR16 also provides that in arriving at its decision on remuneration, the Committee is required to consider the following matters:
● The complexity (or otherwise) of the case;
● Any responsibility of an exceptional kind or
degree which falls on the administrator;
● The effectiveness with which the administrator
appears to be carrying out, or to have carried
out, their duties; and
● The value and nature of the property which the
administrator has to deal with.
Statement of Insolvency Practice No. 9 (“SIP9”)
In addition to IR16, SIP9, issued by the Joint Insolvency Committee, provides guidance to insolvency practitioners in relation to the disclosure of payments to insolvency office holders and their associates.
The purpose of SIP9 is to set out the principles and key compliance standards with which insolvency practitioners are required to comply with regard to the provision of information to creditors and other interested parties who have a financial interest in the level of office holders’ remuneration, disbursements and expenses paid from an insolvent estate.
In accordance with SIP9, which was revised with effect from 1 December 2015, Section 5 shows a summary of the work undertaken by the Administrators in the reporting period and, to the extent that is not prejudicial to the interests of the Company, the expected future work the Administrators are to carry out to achieve the purpose of the Administration is shown in Section 2.
Creditors have the right to ask for information and challenge the Administrators’ fees if they believe that they are too high. Creditors can find an explanatory note online at:
http://www.icaew.com/~/media/corporate/files/technical/insolvency/creditors%20guides/a%20creditors%20guide%20to%20administrators%20fees%20010407.ashx
A copy, free of charge, can be obtained from the Administrators.
Resolutions of the Creditors’ Committee
Given the fundamental uncertainties about the value of the property with which the Administrators have to deal, the Committee resolved that the Administrators’ remuneration be based on the ‘time properly given’ basis – i.e. an hourly billing basis.
The Committee also resolved that the Administrators may draw 75% of their time costs on account to assist with the smoothing of working capital. All such costs are subject to detailed reporting to the Committee and the extent to which the Administrators can draw remuneration is subject to its approval.
Costs incurred and approved to date
To 14 March 2018, the Administrators have drawn fees of £35.3m, including £0.9m of disbursements (exclusive of VAT) in accordance with the Committee resolution and approvals. These fees are shown in the receipts and payments account at Section 7. During the reporting period, the Administrators drew fees of £1.1m on account of their time costs. The time cost charges incurred in the period 1 September 2017 and 28 February 2018 are £1.11m. An analysis of the total hours and cost incurred by grade of staff can be found at Section 5.
Section 4 Joint Administrators’ remuneration and other matters
Joint Administrators’ progress report for the period 15 September 2017 to 14 March 2018 9
Hourly rates
The following table summarises the hourly rate ranges charged per hour for the grades of staff who have already worked on the Administration during the reporting period:
Payments to associates
No work by associates has taken place during the reporting period.
Subcontractors
No work was subcontracted by the Administrators in the reporting period.
Relationships
The Administrators have no business or personal relationships with the parties who approve their fees or who provide services to the Administration where the relationship could give rise to a conflict of interest.
Legal and other professional firms
A summary of legal advisors instructed by the Administrators can be found at Section 6. The Administrators are satisfied that the level of legal and professional costs are appropriate.
Disbursements
The Administrators do not need approval to draw expenses or disbursements unless they are for shared or allocated services provided by their own firm, including room hire, document storage, photocopying, communication facilities. These “Category 2” disbursements must be directly incurred on the case, subject to a reasonable method
of calculation and allocation and approved by the same party who approves their fees.
Category 1 disbursements comprise payments to third parties, for example in relation to travel costs, statutory advertising and insolvency office holders’ insurance.
The Administrators’ expenses policy allows for all properly incurred expenses to be recharged to the Administration.
The following disbursements were incurred in the reporting period:
Description Category 1 (£)
Category 2 (£)
Reimbursement of staff expenses
489 -
Posting and Printing 250 -
IT/ Licence costs 31,438
Total 739 31,438
Grade
Min Rate
(£)
Max
Rate (£)
Partner 812 1,145
Director 712 1,092
Senior Manager 307 969
Manager 292 657
Senior Associate 137 433
Associate 65 245
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rep
ort
fo
r th
e p
eri
od
15 S
ep
tem
ber
20
17
to
14 M
arc
h 2
018
11
Ex
am
ple
s o
f w
ork
un
de
rta
ken
in
th
e si
x m
on
th p
erio
d t
o 1
4 M
arc
h 2
018
, b
rok
en d
ow
n b
y c
ate
go
ry a
re a
s fo
llo
ws:
Str
ate
gy
an
d p
lan
nin
g –
£10
1k
Th
is
wo
rk
rela
tes
to
dir
ecti
ng
a
nd
co
ord
ina
tin
g
the
o
ver
all
co
nd
uct
o
f th
e
Ad
min
istr
ati
on
so
th
at
it i
s p
rog
ress
ed i
n a
tim
ely
an
d e
ffic
ien
t m
an
ner
fo
r th
e
ben
efi
t o
f th
e C
om
pa
ny
’s c
red
ito
rs.
Key
act
ivit
ies
incl
ud
e:
●
Co
nsi
der
ing
a
nd
d
irec
tin
g
the
ov
era
ll
stra
teg
y
for
LB
L,
incl
ud
ing
eng
ag
eme
nt
wit
h s
tak
eh
old
ers;
●
Ov
ersi
gh
t o
f th
e cl
aim
s a
dju
dic
ati
on
pro
cess
;
●
Dir
ecti
ng
L
BL
’s
en
ga
gem
ent
in
the
Wa
terf
all
II
a
pp
lica
tio
n
for
dir
ecti
on
s;
●
Ass
essi
ng
th
e r
an
kin
g o
f su
bo
rdin
ate
d d
ebt
in L
BH
I2,
the
imp
act
on
LB
H P
lc (
of
wh
ich
LB
L i
s th
e m
ajo
r cr
edit
or)
an
d c
on
sid
erin
g w
ith
soli
cito
rs h
ow
LB
L s
ho
uld
en
ga
ge
in a
nti
cip
ate
d a
pp
lica
tio
ns
to C
ou
rt f
or
dir
ecti
on
s a
s re
ga
rds
the
ran
kin
g;
●
In
tera
ctio
ns
wit
h L
BIE
’s A
dm
inis
tra
tors
in r
ela
tio
n t
o t
he
pen
sio
n c
laim
,
rech
arg
es a
nd
th
e co
ntr
ibu
tio
n c
laim
;
●
C
oo
rdin
ati
ng
, d
irec
tin
g a
nd
res
ou
rcin
g w
ork
stre
am
act
ivit
ies;
●
O
ver
sig
ht
of
rep
ort
ing
an
d a
cco
un
tin
g,
incl
ud
ing
per
iod
ic m
eeti
ng
s to
mo
nit
or
pro
gre
ss;
an
d
●
O
ver
sig
ht
of
fun
ds
ma
na
ge
men
t a
nd
in
ves
tmen
t st
rate
gy
.
Sta
tuto
ry
an
d c
om
pli
an
ce
– £
88
k
Wo
rk t
he
Ad
min
istr
ato
rs u
nd
erta
ke
in o
rde
r to
en
sure
co
mp
lia
nce
wit
h s
tatu
tory
a
nd
reg
ula
tory
re
qu
irem
en
ts.
Key
act
ivit
ies
incl
ud
e:
●
Pre
pa
rin
g a
nd
re
po
rtin
g t
o t
he
Co
mm
itte
e a
t th
e m
eeti
ng
hel
d o
n 8
D
ecem
ber
20
17;
●
Pre
pa
rin
g a
nd
iss
uin
g o
f O
cto
ber
20
17 p
rog
ress
re
po
rt t
o c
red
ito
rs;
●
Six
mo
nth
ly r
evie
w o
f ca
se p
rog
ress
;
●
Oth
er s
tatu
tory
fil
ing
s a
t C
om
pa
nie
s H
ou
se a
nd
Co
urt
;
●
Rec
ord
ing
, m
on
ito
rin
g a
nd
rep
ort
ing
of
tim
e sp
ent
by
Ad
min
istr
ati
on
ca
se s
taff
; a
nd
●
Rev
iew
ing
an
d a
pp
rov
ing
le
ga
l a
nd
oth
er t
hir
d p
art
y c
ost
s a
nd
in
vo
ices
.
Ac
co
un
tin
g a
nd
tr
ea
su
ry
– £
12
2k
Wo
rk r
ep
ort
ed i
n t
his
ca
teg
ory
rel
ate
s to
LB
L’s
acc
ou
nti
ng
an
d t
rea
sury
act
ivit
ies
to m
ax
imis
e in
tere
st r
ecei
pts
, m
an
ag
e li
qu
idit
y a
nd
min
imis
e fi
na
nci
al
risk
, p
rese
rvin
g v
alu
e fo
r cr
edit
ors
. K
ey a
ctiv
itie
s in
clu
de:
●
Inv
estm
ent,
m
on
ito
rin
g
an
d
con
tro
l o
f L
BL
’s
fre
e
cash
re
sou
rces
,
incl
ud
ing
en
suri
ng
ca
sh h
eld
at
bes
t ra
tes
on
ly i
n a
pp
rov
ed b
an
ks
an
d
sub
ject
to
fre
qu
entl
y r
evie
wed
lim
its;
●
M
on
ito
rin
g i
nv
estm
ent
stra
teg
y a
nd
re
vie
win
g i
n r
esp
on
se t
o c
ha
ng
ing
ma
rket
co
nd
itio
ns;
●
Rev
iew
ing
liq
uid
ity
an
d i
nv
estm
ent
ma
turi
ties
to
en
sure
su
ffic
ien
t ca
sh
to m
eet
Ad
min
istr
ato
rs’ e
xp
ense
s;
●
P
erio
dic
au
dit
of
trea
sury
pro
cess
es a
nd
pro
ced
ure
s;
Jo
int
Ad
min
istr
ato
rs’ p
rog
ress
rep
ort
fo
r th
e p
eri
od
15 S
ep
tem
ber
20
17
to
14 M
arc
h 2
018
12
●
Ad
her
ence
to
th
e U
K a
nd
US
FA
TC
A a
nd
CR
S;
●
Pre
pa
rin
g o
f p
erio
dic
rec
eip
ts &
pa
ym
ents
re
po
rts
an
d i
nfo
rma
tio
n t
o
sup
po
rt f
ina
nci
al
ma
na
gem
ent
an
d d
ecis
ion
ma
kin
g;
●
P
erio
dic
rec
on
cili
ati
on
of
ba
nk
acc
ou
nts
to
led
ger
;
●
P
rov
idin
g i
np
ut
to V
AT
ret
urn
s a
nd
dis
trib
uti
on
of
VA
T r
ecei
pts
to
oth
er
Leh
ma
n A
dm
inis
tra
tio
n c
om
pa
nie
s;
●
F
ore
ign
ex
cha
ng
e tr
an
sfer
s o
n
rece
ipt
of
ma
teri
al
fore
ign
cu
rre
ncy
ba
lan
ces;
an
d
●
F
aci
lita
tin
g p
ay
men
ts o
f ca
tch
-up
an
d r
eiss
ued
div
iden
ds.
Ta
x a
nd
VA
T –
£3
06
k
Wo
rk r
epo
rted
in
th
is c
ate
go
ry i
ncl
ud
es c
om
pli
an
ce w
ith
ta
x l
egis
lati
on
un
der
th
e A
dm
inis
tra
tors
’ ob
lig
ati
on
s a
s p
rop
er o
ffic
ers
for
tax
, an
d p
lan
nin
g t
o e
nsu
re
the
effi
cien
t re
ali
sati
on
of
ass
ets
for
the
be
nef
it o
f th
e C
om
pa
ny
’s c
red
ito
rs a
s a
w
ho
le.
Wo
rk p
erfo
rmed
in
clu
des
:
●
Pre
pa
rati
on
an
d s
ub
mis
sio
n o
f V
AT
ret
urn
s;
●
D
istr
ibu
tio
n o
f V
AT
rec
eip
ts r
ecei
ved
as
Re
pre
sen
tati
ve
Mem
ber
to
oth
er
Leh
ma
n e
sta
tes
an
d c
oll
ecti
ng
VA
T c
on
trib
uti
on
s;
●
P
rep
ara
tio
n o
f a
cco
un
tin
g i
nfo
rma
tio
n t
o s
up
po
rt t
ax
co
mp
uta
tio
ns;
●
Pre
pa
rati
on
a
nd
su
bm
issi
on
o
f ta
x
retu
rns
incl
ud
ing
th
e im
pa
ct
of
pro
po
sed
ch
an
ges
to
ta
x l
egis
lati
on
;
●
Ad
min
istr
ati
on
of
gro
up
ta
x l
oss
es t
o 3
1 M
ay
20
16;
●
L
iais
ing
w
ith
H
MR
C
reg
ard
ing
se
ttle
men
t o
f p
re
an
d
po
st
Ad
min
istr
ati
on
PA
YE
lia
bil
ity
;
●
Dis
cuss
ion
s w
ith
HM
RC
co
nce
rnin
g a
gre
em
ent
of
ITM
AR
/fo
rgiv
ab
le
loa
n p
osi
tio
n g
oin
g f
orw
ard
;
●
Su
bm
issi
on
o
f m
on
thly
R
TI
retu
rns
for
form
er
emp
loy
ee
div
iden
d
pa
ym
en
ts a
nd
ta
x a
dju
stm
en
ts;
●
T
ax
in
pu
t o
n r
evie
w o
f u
nse
cure
d c
laim
s w
her
e r
eq
uir
ed
;
●
A
ud
it o
f V
AT
an
d t
ax
ret
urn
s, i
mp
lem
enta
tio
n a
nd
mo
nit
ori
ng
of
risk
a
nd
qu
ali
ty m
etri
cs;
●
Co
nsi
der
ati
on
o
f im
pa
ct
on
th
e C
om
pa
ny
o
f ch
an
ges
to
U
K
tax
le
gis
lati
on
, in
clu
din
g l
oss
res
tric
tio
n r
ule
s a
nd
in
tere
st d
edu
ctib
ilit
y;
●
Pro
vid
ing
ta
x a
dv
ice
in r
ela
tio
n t
o t
he
po
ten
tia
l d
edu
ctio
n o
f in
com
e ta
x
at
sou
rce
in t
he
even
t st
atu
tory
in
tere
st p
ay
me
nts
are
ma
de
to c
red
ito
rs;
●
C
om
pli
an
ce w
ith
va
rio
us
rep
ort
ing
ob
lig
ati
on
s in
clu
din
g t
ax
str
ate
gy
a
nd
co
rpo
rate
cri
min
al
off
en
ce l
egis
lati
on
; a
nd
●
Pro
vid
ing
ta
x a
dv
ice
an
d s
up
po
rt o
n t
he
ap
pro
pri
ate
ta
x t
rea
tmen
t o
n
the
seco
nd
in
teri
m
dis
trib
uti
on
to
fo
rmer
e
mp
loy
ees
incl
ud
ing
con
tin
ued
co
rres
po
nd
ence
an
d d
iscu
ssio
ns
wit
h H
MR
C.
Fo
r fu
rth
er i
nfo
rma
tio
n s
ee S
ecti
on
2.4
.
Inte
rc
om
pa
ny
– £
44
k
Th
is w
ork
rel
ate
s to
th
e a
gre
eme
nt
of
inte
rco
mp
an
y b
ala
nce
s a
nd
co
llec
tio
n o
f re
ceiv
ab
les
for
the
ben
efit
of
cred
ito
rs.
Ex
clu
des
ma
tter
s a
ctu
all
y o
r p
ote
nti
all
y
the
sub
ject
of
liti
ga
tio
n.
Se
e S
ecti
on
2.1
fo
r fu
rth
er d
eta
il.
Lit
iga
tio
n –
£2
32
k
LB
L i
s th
e m
ajo
r u
nse
cure
d c
red
ito
r o
f L
BH
Plc
, w
ith
a c
laim
fo
r £
70
9m
.
To
d
ate
, L
BH
Plc
ha
s p
aid
div
iden
ds
of
69
.04
p i
n t
he
£.
Jo
int
Ad
min
istr
ato
rs’ p
rog
ress
rep
ort
fo
r th
e p
eri
od
15 S
ep
tem
ber
20
17
to
14 M
arc
h 2
018
13
LB
H p
lc h
as
a n
um
ber
of
ass
ets
wh
ich
it
ha
s y
et t
o r
eali
se,
ho
wev
er t
he
larg
est
is
a s
ub
ord
ina
ted
cla
im i
n L
BH
I2.
It i
s a
nti
cip
ate
d t
ha
t L
BH
I2 m
ay
rec
eiv
e m
ate
ria
l a
dd
itio
na
l fu
nd
s in
du
e co
urs
e
an
d b
e in
a p
osi
tio
n t
o p
ay
dis
trib
uti
on
s to
its
cred
ito
rs w
ith
su
bo
rdin
ate
d c
laim
s.
In a
dd
itio
n t
o t
he
sub
ord
ina
ted
cla
im f
rom
LB
H P
lc d
escr
ibed
ab
ov
e, t
her
e is
a
no
ther
ma
teri
al
sub
ord
ina
ted
lia
bil
ity
in
LB
HI2
. I
t is
un
clea
r w
het
he
r th
e t
wo
su
bo
rdin
ate
d c
laim
s ra
nk
eq
ua
lly
(p
ari
pa
ssu
), o
r if
on
e o
r th
e o
ther
ra
nk
s fi
rst.
T
he
an
swer
to
th
at
qu
esti
on
is
lik
ely
to
ha
ve
a m
ate
ria
l im
pa
ct o
n r
eali
sati
on
s in
L
BH
Plc
an
d i
n t
urn
, in
LB
L a
s th
e m
ajo
r u
nse
cure
d c
red
ito
r o
f L
BH
Plc
.
In t
he
cou
rse
of
the
Wa
terf
all
III
lit
iga
tio
n,
a v
ery
la
rge
nu
mb
er o
f d
ocu
men
ts
wer
e ex
tra
cted
fro
m t
he
Le
hm
an
arc
hiv
es a
nd
ass
emb
led
in
to a
sea
rch
ab
le f
orm
.
Th
is
ma
teri
al
incl
ud
ed
do
cum
ents
p
ote
nti
all
y
rele
va
nt
to
the
ra
nk
ing
o
f su
bo
rdin
ate
d c
laim
s in
LB
HI2
. A
cco
rdin
gly
arr
an
ge
men
ts w
ere
ma
de
for
the
d
ocu
men
ts t
o b
e m
ad
e a
va
ila
ble
an
d s
earc
hed
.
Th
e A
dm
inis
tra
tors
ha
ve
eng
ag
ed e
xte
nsi
vel
y w
ith
so
lici
tors
an
d C
ou
nse
l to
a
scer
tain
ho
w b
est
to
ap
pro
ach
th
e a
pp
lica
tio
n f
or
dir
ecti
on
s, t
he
pri
nci
ple
o
bje
ctiv
e b
ein
g t
o e
nsu
re t
ha
t a
ll a
rgu
men
ts t
ha
t co
uld
be
ma
de
in f
av
ou
r o
f L
BL
’s
po
siti
on
wer
e m
ad
e to
th
e C
ou
rt.
Th
e A
dm
inis
tra
tors
ha
ve
als
o e
ng
ag
ed w
ith
th
e A
dm
inis
tra
tors
of
LB
H P
lc a
nd
L
BH
I2,
an
d a
lso
wit
h L
BH
I w
hic
h h
as
a m
ate
ria
l fi
na
nci
al
inte
rest
.
Em
plo
ye
e a
nd
cr
ed
ito
r c
laim
s –
£2
23
k
Gen
era
l su
pp
lier
cre
dit
or
cla
ims
Ad
jud
ica
tio
n o
f su
pp
lie
r cl
aim
s a
nd
co
rres
po
nd
ing
wit
h c
red
ito
rs t
o
ob
tain
fu
rth
er i
nfo
rma
tio
n;
Ob
tain
ing
an
d v
erif
yin
g r
ev
ised
ba
nk
acc
ou
nt
det
ail
s fr
om
cre
dit
ors
;
Re-
issu
e o
f re
turn
ed d
ivid
en
ds
to c
red
ito
rs;
On
go
ing
leg
al
ad
vic
e in
res
pec
t o
f co
mp
lex
su
pp
lier
cla
ims;
Dea
lin
g w
ith
a n
um
ber
of
qu
erie
s fr
om
cla
ims
ag
gre
ga
tors
an
d c
red
ito
rs
wh
o h
av
e a
ssig
ned
th
eir
cla
ims;
an
d
Up
da
tin
g c
red
ito
r co
nta
ct d
eta
ils
as
no
tifi
ed.
Em
plo
yee
cla
ims
Ob
tain
ing
an
d v
erif
yin
g r
ev
ised
ba
nk
acc
ou
nt
det
ail
s fr
om
em
plo
yee
cr
edit
ors
;
Ca
lcu
lati
ng
an
d p
ay
ing
of
catc
h u
p d
ivid
end
s to
em
plo
yee
cre
dit
ors
;
Re-
issu
e o
f re
turn
ed d
ivid
en
ds
to e
mp
loy
ee
cred
ito
rs;
Co
nti
nu
ed w
ork
to
rev
iew
an
d a
dju
dic
ate
fo
rme
r em
plo
yee
s’ c
laim
s;
On
go
ing
en
ga
ge
men
t w
ith
em
plo
yee
cre
dit
ors
to
res
olv
e o
uts
tan
din
g
emp
loy
men
t tr
ibu
na
l cl
aim
s a
nd
d
iscu
ssio
ns
wit
h
law
yer
s to
a
gre
e
stra
teg
y t
o d
eal
wit
h t
hes
e cl
aim
s; a
nd
Up
da
tin
g e
mp
loy
ee c
red
ito
r co
nta
ct d
eta
ils
as
no
tifi
ed.
See
Sec
tio
n 2
.3 f
or
furt
her
in
form
ati
on
on
th
e a
bo
ve
wo
rkst
rea
ms.
Jo
int
Ad
min
istr
ato
rs’ p
rog
ress
rep
ort
fo
r th
e p
eri
od
15 S
ep
tem
ber
20
17
to
14 M
arc
h 2
018
14
Se
rv
ice
pr
ov
ide
d
Na
me
of
fir
m /
or
ga
nis
ati
on
R
ea
so
n s
ele
cte
d
Ba
sis
of
fee
s
Leg
al
serv
ices
, in
clu
din
g:
Lo
cal
ad
vic
e o
n o
ver
sea
s a
sset
rea
lisa
tio
ns.
Lit
iga
tio
n a
dv
ice
an
d
con
sid
era
ble
in
pu
t o
n m
att
ers
incl
ud
ing
th
ose
cen
tra
l to
th
e
“Wa
terf
all
” p
roce
edin
gs.
Leg
al
inp
ut
into
th
e c
laim
s
ad
jud
ica
tio
n p
roce
ss w
her
e
req
uir
ed.
Ad
vic
e o
n o
ther
ad
-ho
c m
att
ers.
Bu
is B
urg
i A
G
Dec
her
t L
LP
DL
A P
iper
UK
LL
P
Lin
kla
ters
LL
P
Sp
ecia
list
kn
ow
led
ge
an
d
exp
erie
nce
(in
ov
erse
as
juri
sdic
tio
ns,
wh
ere
ap
pli
cab
le)
Tim
e co
st b
asi
s. T
ime
cost
an
aly
ses
are
re
vie
wed
an
d
ap
pro
ved
pri
or
to p
ay
me
nt
of
inv
oic
es.
Se
cti
on
6 L
eg
al
an
d o
the
r p
ro
fes
sio
na
ls
Jo
int
Ad
min
istr
ato
rs’ p
rog
ress
rep
ort
fo
r th
e p
eri
od
15 S
ep
tem
ber
20
17
to
14 M
arc
h 2
018
15
As a
t 14 M
ar 2
018
As a
t 14 S
ep
2017
Am
ou
nt
in m
illio
ns
GB
PE
UR
US
DC
HF
To
tal in
GB
P
To
tal in
GB
P
Mo
ve
me
nt
Re
ce
ipts
Contr
ibution fro
m third p
art
ies 1
141.9
0.6
11.3
-
149.6
149.6
-
Buildin
g r
echarg
e r
eceip
ts
130.3
-
-
-
130.3
130.3
-
Payro
ll r
echarg
e r
eceip
ts502.0
0.1
57.1
-
538.4
538.4
-
Oth
er
(inclu
din
g r
ealisations a
nd p
aym
ents
for
oth
er
com
panie
s)
748.2
3.9
218.3
0.2
890.5
886.0
4.5
Tax r
ela
ted r
eceip
ts719.9
-
-
-
719.9
711.9
8.0
VA
T r
eceiv
ed o
n invoic
es
7.2
-
-
-
7.2
7.2
-
To
tal re
ce
ipts
fo
r p
erio
d2,2
49.5
4.6
286.7
0.2
2,4
35.9
2,4
23.4
12.5
Paym
en
ts
Buildin
g a
nd o
ccupancy c
ost
(179.5
)
(0.3
)
(62.9
)
-
(219.8
)
(219.8
)
-
Payro
ll a
nd e
mplo
yee c
osts
2(5
20.4
)
(2.8
)
(45.2
)
-
(551.5
)
(551.5
)
-
Retu
rn o
f re
charg
e s
urp
lus
(2.4
)
-
-
-
(2.4
)
(2.4
)
-
Oth
er
costs
and p
aym
ents
(69.5
)
(0.3
)
(1.2
)
-
(70.5
)
(70.5
)
-
Oth
er
advis
ors
' costs
(1.3
)
-
-
-
(1.3
)
(1.3
)
-
Legal fe
es
(35.2
)
-
(0.1
)
-
(35.3
)
(34.4
)
(0.9
)
Adm
inis
trato
rs' fe
es 3
(35.3
)
-
-
-
(35.3
)
(34.2
)
(1.1
)
Retu
rn o
f C
orp
ora
tion T
ax to g
roup c
om
panie
s(4
69.1
)
-
-
-
(469.1
)
(466.7
)
(2.4
)
VA
T r
ela
ted p
aym
ents
(196.6
)
-
-
-
(196.6
)
(192.6
)
(4.0
)
VA
T p
aid
on invoic
es
(14.5
)
-
(1.4
)
-
(15.4
)
(15.0
)
(0.4
)
Inte
rcom
pany tra
nsfe
r(1
.5)
-
-
-
(1.5
)
(1.5
)
-
To
tal p
aym
en
ts f
or p
erio
d(1
,525.3
)
(3.4
)
(110.8
)
-
(1,5
98.7
)
(1,5
89.9
)
(8.8
)
Inte
r-c
urre
ncy t
ran
sfe
rs
Receip
ts fro
m inte
r-curr
ency tra
nsfe
rs148.8
2.7
57.8
-
187.8
182.9
4.9
Paym
ents
fro
m inte
r-curr
ency tra
nsfe
rs(3
1.1
)
(3.9
)
(233.2
)
(0.2
)
(182.9
)
(178.8
)
(4.1
)
Ne
t in
ter-c
urre
ncy t
ran
sfe
rs
117.7
(1.2
)
(175.4
)
(0.2
)
4.9
4.1
0.8
Dis
trib
uti
on
s
Dis
trib
ution to p
refe
rential cre
ditors
@ 1
00p/£
(decla
red 0
7/0
6/1
3)
(1.9
)
-
-
-
(1.9
)
(1.9
)
-
Dis
trib
ution to u
nsecure
d c
reditors
@ 1
.66p/£
(decla
red 1
5/1
2/1
4)
(11.3
)
(11.3
)
(11.3
)
-
Dis
trib
ution to u
nsecure
d c
reditors
@ 9
8.3
4p/£
(decla
red 0
6/0
9/1
7)
(667.4
)
(667.4
)
(667.3
)
(0.1
)
Dis
trib
ution to s
ubord
inate
d c
reditors
@ 7
7.4
4p/£
(decla
red 0
6/0
9/1
7)
(19.4
)
-
-
-
(19.4
)
(19.4
)
-
To
tal d
istr
ibu
tio
ns
(700.0
)
-
-
-
(700.0
)
(699.9
)
(0.1
)
Ne
t cash
po
sit
ion
141.9
-
0.5
-
142.1
137.7
4.4
Ban
k b
ala
nce
s
Bank o
f E
ngla
nd
-
-
-
-
-
-
-
HS
BC
43.5
-
0.5
-
3.8
5.4
(1.6
)
Money M
ark
et F
unds
138.3
-
-
-
138.3
132.3
6.0
Ne
t b
an
k b
ala
nce
141.8
-
0.5
-
142.1
137.7
4.4
No
tes:
1)
Inclu
des e
lem
ents
of buildin
g &
occupancy a
nd p
ayro
ll r
ela
ted r
echarg
es
2)
Payro
ll c
ost
att
ributa
ble
to L
BL
3)
Inclu
des A
dm
inis
trato
rs' dis
burs
em
ents
of £0.9
m
4)
Funds h
eld
in inte
rest
bearing a
ccounts
Ra
tes u
se
d f
or c
on
ve
rsio
n a
re
Fin
an
cia
l T
ime
s r
ate
s f
ixe
d o
n 1
4 M
arch
2012.
1 U
SD
= 0
.6366 G
BP
1 E
UR
= 0
.8322 G
BP
1 C
HF
= 0
.6874 G
BP
Se
cti
on
7 R
ec
eip
ts a
nd
pa
ym
en
ts t
o 1
4 M
ar
ch
20
18
Jo
int
Ad
min
istr
ato
rs’ p
rog
ress
rep
ort
fo
r th
e p
eri
od
15 S
ep
tem
ber
20
17
to
14 M
arc
h 2
018
16
Th
e fo
llo
win
g t
ab
le p
rov
ides
det
ail
s o
f A
dm
inis
tra
tio
n e
xp
en
ses.
E
xp
en
ses
are
am
ou
nts
pro
per
ly p
ay
ab
le b
y t
he
Ad
min
istr
ato
rs f
rom
th
e es
tate
in
clu
din
g f
ees,
bu
t ex
clu
din
g d
istr
ibu
tio
ns
to c
red
ito
rs. T
he
tab
le a
lso
ex
clu
des
an
y p
ote
nti
al
tax
lia
bil
itie
s p
ay
ab
le a
s a
n A
dm
inis
tra
tio
n e
xp
en
se b
eca
use
am
ou
nts
bec
om
ing
du
e w
ill
de
pen
d
on
th
e p
osi
tio
n a
t th
e en
d o
f th
e ta
x a
cco
un
tin
g p
eri
od
.
Th
e ta
ble
sh
ou
ld b
e re
ad
in
co
nju
nct
ion
wit
h t
he
rece
ipts
an
d p
ay
me
nts
acc
ou
nt
at
Sec
tio
n 7
, w
hic
h s
ho
ws
exp
ense
s p
aid
du
rin
g t
he
per
iod
an
d t
he
tota
l p
aid
to
da
te.
R&
P c
ate
go
ry
Pa
id i
n p
re
vio
us
pe
rio
ds (
£m
)
Pa
id i
n p
er
iod
(£m
)
In
cu
rr
ed
in
pe
rio
d
bu
t n
ot
pa
id (
£m
) C
um
ula
tiv
e (
£m
)
Esti
ma
ted
fu
tur
e (
£m
) 1
Esti
ma
ted
to
tal
(£m
)
Bu
ild
ing
an
d o
ccu
pa
ncy
co
sts
219
.8
- -
219
.8
- 2
19.8
Pa
yro
ll a
nd
em
plo
yee
co
sts
55
1.5
-
- 5
51.
5
- 5
51.
5
Ret
urn
of
rech
arg
e su
rplu
s 2
.4
- -
2.4
-
2.4
Oth
er c
ost
s a
nd
pa
ym
ents
7
0.5
-
- 7
0.5
5
.0
75
.5
Oth
er a
dv
iso
rs’ c
ost
s 2
1.3
-
- 1.
3
Ma
teri
all
y u
nce
rta
in
Ma
teri
all
y u
nce
rta
in
Leg
al
fees
2
34
.4
0.9
0
.3
35
.6
Ma
teri
all
y u
nce
rta
in
Ma
teri
all
y u
nce
rta
in
Ad
min
istr
ato
rs’ t
ime
cost
s 2
, 3
33
.3
1.1
0.2
3
4.6
M
ate
ria
lly
un
cert
ain
M
ate
ria
lly
un
cert
ain
Ad
min
istr
ato
rs’ d
isb
urs
emen
ts 2
0
.9
- 0
.1
1.0
M
ate
ria
lly
un
cert
ain
M
ate
ria
lly
un
cert
ain
To
tal
914
.1
2.0
0
.6
916
.7
Ma
teri
all
y u
nce
rta
in
Ma
teri
all
y u
nce
rta
in
No
tes
:
1) R
ela
tes
on
ly t
o L
BL
co
sts.
No
pro
vis
ion
ha
s b
een
ma
de
for
cost
s b
orn
e b
y L
BL
an
d r
ech
arg
ed t
o o
ther
Leh
ma
n e
sta
tes.
2)
Th
ese
cost
s a
re h
igh
ly c
on
tin
gen
t o
n t
he
ou
tco
me
of
on
go
ing
an
d p
rosp
ecti
ve
liti
ga
tio
n,
furt
her
in
form
ati
on
on
wh
ich
ca
n b
e fo
un
d a
t S
ecti
on
2.
As
a r
esu
lt,
it i
s n
ot
po
ssib
le t
o p
rov
ide
a m
ean
ing
ful
esti
ma
te
of
the
tota
l ex
pen
se.
3)
Th
e A
dm
inis
tra
tors
est
ima
te t
ha
t th
ose
co
sts
no
t d
epen
den
t (e
xce
pt
in d
ura
tio
n)
up
on
th
e p
rog
ress
ion
of
issu
es s
ub
ject
to
lit
iga
tio
n a
nd
th
at
are
cu
rren
tly
req
uir
ed t
o m
ain
tain
th
e ro
uti
ne
asp
ects
of
the
Ad
min
istr
ati
on
are
c.
£5
00
k p
er a
nn
um
.
4)
Ex
clu
des
VA
T,
wh
ich
is
pa
rtly
rec
ov
era
ble
.
Se
cti
on
8 S
tate
me
nt
of
ex
pe
ns
es
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© 2018 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. HB-2012-03-29-08 59-CG