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Updated: Clifford Chance in line for windfall payment after PwC reaches European Lehman settlement

Clifford Chance is among the creditors of the European operations of Lehman Brothers set to receive a windfall after administrator PwC announced a total payout of $7.8bn, the latest in a series of payments made to creditors of the former US investment bank as it nears the end of its mammoth winding-up process.

According to one partner at the Magic Circle firm, the payment could be as much as £10m and a spokesperson for PwC said creditors are likely to receive payment before the end of the calendar year.

Lehman Brothers filed for Chapter 11 bankruptcy in September 2008, listing $639bn of assets against $613bn of outstanding debt but within days creditors filed claims of $1.2trn, double its assets.

PwC reached a settlement with Lehman Brothers International Europe (LBIE)’s former US parent company Lehman Brothers Inc (LBI) in June, paving the way for a return of assets held by the bank. With this latest round of payouts creditors are expected to receive all their money back plus, in some cases, interest.

Meanwhile, the legal fees in the LBIE administration for the six months to 14 September 2013 have reached £295m, with the total US and UK fees and expenses earned by lawyers and other professionals standing at $2bn since Lehman Brothers filed for bankruptcy, an indication of the scale of the task of unwinding the global financial institution’s affairs.

The most recent legal costs relate to advice given, as well as court proceedings and litigation conducted in numerous jurisdictions by a number of legal firms in connection with the LBIE administration.

It was Linklaters, advising alongside Davis Polk & Wardwell, that earlier this year won the settlement resolving all legal and factual issues between LBIE and LBI. Linklaters has advised PwC as administrator on English law matters since 2008. The Magic Circle firm has fielded a large team, including restructuring partners David Ereira, Tony Bugg and Richard Holden in London and litigation partner James Warnot in New York.

Other firms to land roles on the administration include Weil, Gotshal & Manges, New York-based Hughes Hubbard & Reed and legacy Norton Rose.

Clifford Chance declined to comment.

It is expected a number of other Lehman advisers will gain windfalls for written-off fees.

Update: Over 30 other law firms have been named as creditors set to receive a windfall of the European operations of Lehman Brothers in a list published by PwC on 5 December.

The firms owed money by Lehman Brothers International Europe (LBIE) are confirmed as trade creditors in a 300-strong list. In addition to Clifford Chance, fellow Magic Circle firms Allen & Overy, Linklaters, Slaughter and May, and Freshfields Bruckhaus Deringer are due to be reimbursed.

Other firms listed includes Dublin-based firms A&L Goodbody, McCann FitzGerald and Dillon Eustace; and US firms McDermott Will & Emery, Skadden, Arps Slate, Meagher & Flom, and Weil, Gotshal & Manges. The now-defunct Dewey & LeBoeuf is also named as a recipient.