Charles Russell Speechlys successfully advises the Joint Liquidators of LB GP No.1 Ltd in Lehman Brothers litigation before the High Court in London

Charles Russell Speechlys’ insolvency and restructuring team has successfully acted for Bruce Mackay and Matt Haw of RSM UK Restructuring Advisory LLP, the Joint Liquidators of LB GP No.1 Ltd, in litigation before the High Court concerning LBGP’s claim to be paid funds out of the Lehman Brothers “waterfall”.

The litigation related to LBGP’s Court of Appeal success in 2021 and concerned, amongst other things, the competing priority of multi-billion US$ subordinated debt structures. The High Court’s judgment is essential reading for those advising on issues relating to: subordination of debt, contractual interpretation and strike out applications in the context of insolvency.

The High Court found in favour of LBGP’s position that its claim to be paid statutory interest on its priority subordinated claim ranks ahead of Lehman Brothers Holdings Inc.’s claim to be paid principal in relation to is junior subordinated claim. Subject to any appeal, the High Court’s decision is a move towards enabling further potentially significant funds to flow to LBGP pursuant to a framework agreement dated 8 October 2023.

The Charles Russell Speechlys team acting for RSM UK instructed Lexa Hilliard QC and Tom Roscoe of Wilberforce Chambers. The litigation was led by Dan Moore, Partner, with involvement from James Hyne, Partner, Carris Peacey, Associate, and Jack Sears, Trainee Solicitor. 

Dan Moore, Partner comments:

We are delighted that after significant litigation, the High Court has agreed with LBGP’s claim that its subordinated claim ranks above that of LBHI not only in relation to principal but also in relation to statutory interest. This takes LBGP closer to distributing significant funds.