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UK-based staff may not be paid for their final week; EMPLOYEES BANKING CRISIS.

UK staff of collapsed investment bank Lehman Brothers face not being paid this week, administrators warned yesterday.

The bank's main UK operation - which employs 4,500 - was placed into administration yesterday shortly after its US parent filed for bankruptcy protection.

Administrator PricewaterhouseCoopers (PWC) said picking over the firm's UK business was an "extraordinarily complex" task and would take "significant" time.

Staff numbers will also be "downsized", the firm added.

PWC partner Tony Lomas, who indicated the forthcoming wage bill was EUR75 million (pounds 42 million), said: "(The administration) is a period of stress and distress for the people. We started the day with no certainty we would have cash to make payment due at the end of this week.

We still don't know what the position is.

He added: "There's a huge number of transactions here of vast values. It's going to take quite some time to unravel the affairs of the company."

The collapse of Lehman Brothers - which dates back to 1850 - caused meltdown in global financial markets.

London's leading share index slumped more than five per cent at one point before losses eased to less than four per cent.

There were also hefty stock market losses inWall Street and around Europe.

Mr Lomas said administrators were called into Lehman's UK arm after its US parent pulled the plug on funding this morning.

He said: "It wasn't until very late last night and early this morning the board were told from New York there would be no further support from the US parent.

"Therefore it left the UK company... having insufficient funds to pay their liabilities at open of business on Monday morning. Every subsidiary was dependent on the flow of cash from New York."
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Publication:The Birmingham Post (England)
Date:Sep 16, 2008
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