OZschwitz: Dozens of councils have lost hundreds of millions of dollars in subprime investment products

A MOTION by creditors including councils to remove PPB as administrator of Lehman Brothers Australia failed at the first meeting of creditors last week.

Thirty-nine creditors voted for the removal and 18 against but the motion failed because the value of debts admitted by the administrator was less than the debts claimed. Dozens of NSW councils have lost hundreds of millions of dollars in subprime investment products promoted by Lehman and others.

The meeting was told that Lehman has estimated assets of $600 million and debts of $254 million. However, the debts admitted by the administrator do not include claims for losses on investments sold to councils by Lehman Brothers.

Mike Hyde, the general manager of Wingecarribee Shire Council, which has taken Lehman to the Federal Court in what is regarded as a test case for councils, said after the meeting the court proceedings "are far from futile". The council has spent more than $565,000 on legal costs.

LNK

OZschwitz: Dozens of councils have lost hundreds of millions of dollars in subprime investment products

OZschwitz: Dozens of councils have lost hundreds of millions of dollars in subprime investment products

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