Lehman Brothers: Lawyer Had to Haggle to Keep The Lights On
A £600-an-hour City lawyer was left haggling with EDF, the French energy company, in a desperate attempt to keep the lights on at Lehman Brothers' London headquarters just hours after its American parent collapsed, it has emerged.
Euan Clarke, a Linklaters insolvency partner more accustomed to deconstructing complex financial products than electricity supplies, persuaded EDF not to switch off the power at Lehman's 33-storey office tower on September 18 last year.
During an emergency conference call convened after “repeated threats” from EDF, Mr Clarke agreed to the energy group's demands to transfer Lehmans' Canary Wharf supply to a more expensive electricity tariff.
Mr Clarke, part of an army of lawyers and accountants frantically trying to salvage Lehmans' $600 million of European assets, was interrupted to address the more pressing issue of keeping the air conditioning running.
According to court documents seen by The Times, just hours after Lehman collapsed on September 15 last year, EDF began issuing ultimatums to PricewaterhouseCoopers, the bank's administrators, to sign a new electricity contract.
EDF, which at one point gave Lehman 38 minutes to reply to an e-mail or be disconnected, claimed that by entering administration, the bank had forfeited its existing electricity contract and must sign a new agreement. When the bank refused, EDF said it must transfer to a higher interim tariff or it would be disconnected.
The dispute is now the subject of a High Court lawsuit. Lehman, which claims it was entitled to remain on its existing rate, is suing EDF for £3.5 million, the amount it says it has overpaid since being forced to move to the higher tariff. It is also seeking a declaration that EDF must continue to supply electricity at the original rate.
EDF said: “EDF Energy has endeavoured to resolve matters and regret the action which has been taken by the administrators. We have now served a defence and it would not be appropriate to comment further at this stage.” PwC declined to comment.
Mr Clarke is one of 20 Linklaters partners and about 80 associates working full-time on the Lehman administration. They are part of a several hundred-strong staff of lawyers, accountants and former Lehman employees who are expected to remain in the bank's London headquarters for several years while its affairs are wound up.
Euan Clarke, a Linklaters insolvency partner more accustomed to deconstructing complex financial products than electricity supplies, persuaded EDF not to switch off the power at Lehman's 33-storey office tower on September 18 last year.
During an emergency conference call convened after “repeated threats” from EDF, Mr Clarke agreed to the energy group's demands to transfer Lehmans' Canary Wharf supply to a more expensive electricity tariff.
Mr Clarke, part of an army of lawyers and accountants frantically trying to salvage Lehmans' $600 million of European assets, was interrupted to address the more pressing issue of keeping the air conditioning running.
According to court documents seen by The Times, just hours after Lehman collapsed on September 15 last year, EDF began issuing ultimatums to PricewaterhouseCoopers, the bank's administrators, to sign a new electricity contract.
EDF, which at one point gave Lehman 38 minutes to reply to an e-mail or be disconnected, claimed that by entering administration, the bank had forfeited its existing electricity contract and must sign a new agreement. When the bank refused, EDF said it must transfer to a higher interim tariff or it would be disconnected.
The dispute is now the subject of a High Court lawsuit. Lehman, which claims it was entitled to remain on its existing rate, is suing EDF for £3.5 million, the amount it says it has overpaid since being forced to move to the higher tariff. It is also seeking a declaration that EDF must continue to supply electricity at the original rate.
EDF said: “EDF Energy has endeavoured to resolve matters and regret the action which has been taken by the administrators. We have now served a defence and it would not be appropriate to comment further at this stage.” PwC declined to comment.
Mr Clarke is one of 20 Linklaters partners and about 80 associates working full-time on the Lehman administration. They are part of a several hundred-strong staff of lawyers, accountants and former Lehman employees who are expected to remain in the bank's London headquarters for several years while its affairs are wound up.
quoted from: Times Online
