Lehman Waterfall proceedings

In a judgment handed down by the Supreme Court on 17 May the administrators of Lehman Brothers Limited, represented by DLA Piper’s Restructuring practice, have succeeded in the long running Lehman Waterfall proceedings.

The court was asked to consider certain issues relating to distributions in the estate of Lehman Brothers International (Europe) (LBIE), an unlimited company in administration. Such issues arose due to a substantial anticipated surplus in LBIE and sought to resolve particular lacunas in UK insolvency legislation.

In a leading judgment given by Lord Neuberger, the Supreme Court rejected attempts to extend, adapt and create law by ingenious and elaborate mechanisms. Instead it placed an emphasis on interpreting existing legislation with proper regard to the language of the provision, particularly in areas such as insolvency legislation where a complete code was already provided.

As a result the Supreme Court acknowledged and accepted that there are certain lacunas and faults in the existing legislation and gave a clear direction that the courts should be reluctant to fill them. This more conservative approach may produce interesting consequences in future litigation both within, and outside of, an insolvency context.

Chris Parker, Restructuring partner at DLA Piper who acted for Lehman Brothers Limited, said: “Essentially we were looking for a clarification on novel points of law, many of which have never been considered before. The Supreme Court judgment will have broader implications in respect of the way the courts interpret legislation. This was a very complex and long running case, one that has lasted five years and has required significant input and commitment from DLA Piper’s Restructuring team.”

The DLA Piper team acting for Lehman Brothers Limited was led by Restructuring partners Chris Parker and Michael Fiddy.


Involved fees earner: Chris Parker – DLA Piper; Michael Fiddy – DLA Piper;

Law Firms: DLA Piper;

Clients: Lehman Brothers;