PricewaterhouseCoopers Seeks Dismissal of Lehman Brothers Finance AG's Chapter 11 Case

On February 10, 2009, PricewaterhouseCoopers AG, Zurich, in its role as the bankruptcy liquidator and putative foreign representative of Lehman Brothers Finance AG (also known as Lehman Brothers Finance SA) (”LBF”), filed a motion seeking the dismissal of LBF’s chapter 11 bankruptcy case.  Concurrently, PwC also filed a petition under chapter 15 of the Bankruptcy Code seeking recognition of an ongoing bankruptcy proceeding in Switzerland (LBF is a Swiss corporation) as a foreign main proceeding.

LBF is a wholly-owned subsidiary of Lehman Brothers Holdings Inc. (”LBHI”), which filed for bankruptcy protection on September 15, 2008.  LBF’s chapter 11 petition was filed on October 3, 2008 and its petition was signed by the Chief Restructuring Officer of LBHI.  However, according to the motion, neither LBF’s board of directors nor PwC (which, at that point in time, was acting as an “Observer” of LBF at the appointment of the Swiss Federal Banking Commission) authorized the U.S. bankruptcy filing.

The motion argues that the Swiss bankruptcy proceeding with a chapter 15 proceeding in the U.S. “is the most efficient, expeditious, and appropriate vehicle for administering LBF’s limited assets in the United States.”  The motion further states that most of LBF’s assets and creditors (and all of its employees) are located outside the United States.

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