LBIE entered into administration on 15 September 2008. Prior to LBIE entering administration, LBIE and Citigroup - acting both in its own capacity and as agent for third parties - had entered into a large volume of complex and vanilla OTC derivatives, stock lending, repo transactions and prime brokerage and trading arrangements. Citigroup had been holding LBIE's custody assets whilst it assessed its exposure to LBIE and to Lehman entities across the globe.
The custody assets were valued at over US$2.5 billion and had been held for LBIE by Citigroup's custody business in a number of countries around the globe, including Australia, Greece, Poland, Russia, South Korea, Switzerland, Taiwan and Turkey. Under the terms of the Settlement Deed, Citigroup committed to transferring to LBIE its custody assets, and LBIE agreed to pay Citigroup custodian fees to reflect the complexity of the Lehman estate and the custody positions. Both parties released each other in totality from all other claims or liabilities.
Travers Smith acted as lead counsel to the Joint Administrators and coordinated advice from law firms in all the relevant jurisdictions.
“...a landmark deal which the team has worked extremely hard to achieve, over many months. This is by far the largest single deal we have undertaken and easily the most complex to negotiate and then structure given the sheer scale of the legacy relationship between Citigroup and LBIE. This is a major step forward for the LBIE estate.”
Paul Copley, Partner, PwC
Details of the deal
Size - US$2.5bn
Advised the Joint Administrators of Lehman Brothers International Europe on their settlement with Citigroup
Australia, Greece, Poland, Russia, South Korea, Switzerland, Taiwan, Turkey