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LONDON

Administrators of the European arm of failed investment bank Lehman Brothers Holdings Inc. said Friday that untangling its financial dealings will be a much bigger -- and far lengthier -- task than dealing with the fallout of the collapse of energy company Enron Corp.

After meeting with more than 1,000 creditors of Lehman Brothers International (Europe), or LBIE, in London, administrators from accountancy firm PriceWaterhouseCoopers said that they had recovered around just $5 billion of a potential $550 billion of obligations to creditors on the bank's balance sheet.

The PWC team is trying to unravel a complex web of tens of thousands of trades that amount to more than $1 trillion and expressed disappointment that two months into the job they are further behind than planned because they have yet to receive confirmation about LBIE funds held by third parties.

"In scale, it is going to be 10 times as big and as complicated," PWC administrator Tony Lomas told journalists, referring to the Enron case and noting that he and several of his associates were still working on those files some seven years down the road.

"I don't see this is going to be any quicker or any easier than that," he added.

Lomas said it was far too early to tell how much creditors would get once the assets and liabilites are unwound among third parties and other Lehman businesses around the world.

"The balance sheet position will be north of $1 trillion and we've got a long way to go before knowing what the position is for creditors and, if there is a shortfall, just how short it will be," he said.

Billions of dollars in bad debt forced Lehman Brothers, once the fourth-largest investment bank in the U.S., to file for bankruptcy in September amid the world's worst financial crisis in decades.

The bank's collapse shocked many who thought the U.S. Treasury would step in to keep it afloat. Uncertainty over the consequences of the failure -- with thousands of counterparties on Lehmans' complex derivative contracts left potentially exposed -- dealt a severe shock to the financial system.

PWC already has succeeded in negotiating a deal with Japanese brokerage Nomura Holdings Inc. for it to buy Lehman's European and Middle Eastern equities and investment banking operations.

PWC declined to specify how many creditors there are to the European business, but said that details of Friday's meeting were sent out to around 11,500 individuals and businesses. Around 100 creditors have applied for "hardship status" because of their own financial positions, which, if granted, would expedite their claims.

Around 1,000 European workers lost their jobs as a result of the collapse and another 500 resigned.

Around 2,500 staff, mostly at the European arm's London headquarters in the Canary Wharf financial district, were transferred to Nomura and another 1,100 are now on the books of PWC.

Pearson said that staffing costs are now running at $8 million a week, while fees to engage PWC are racking up some 4 million pounds ($6 million) a week.

Nomura is also purchasing the bank's franchise in the Asia Pacific region, including Japan and Australia.

Barclays PLC, which walked away from a deal to buy the entire company before the collapse, has bought Lehman's North American investment banking and capital markets businesses as well as its New York headquarters.

Deutsche Bank AG said this week that it has sued the bank to recover $72.5 million it says was accidentally transferred to Lehman after it had filed for bankruptcy.

PWC associate Steven Pearson said Friday that Lehman Brothers Bankhaus AG in Germany, which is in moratorium and likely to be given insolvency protection, has $1 billion in deposits owned by LBIE.

Lehman's liquidation is the biggest bankruptcy filing in U.S. history. It filed with assets of $639 billion and debt of $613 billion.

Modernist

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LONDON, September 19, 2008

By Sarah Mower

Abdul Koroma and Andrew Jones are not typical photo-fit young British designers, whether in their working patterns or, come to that, their clothes patterns. In their day jobs, the two work for MaxMara, and their own collection strives for something more sophisticated than East End edgy. (They have a studio in London from which they design the Modernist line. What kick-started them to set up the label was entering the Fashion Fringe competition in 2005.)

This season, Koroma and Jones based their ideas on wedding trousseaux, using lace, tulle, and organdy in ornate dresses and sheer blouses. If some of it was overworked and problematic to wear (stiff panniers and peplums; lots of exposed bras), the simplest numbers came out well (a pristine white brocade pantsuit; a violet chiffon dress with a gathered neckline, bloused into the waist with a ribbon sash; a chic navy drop-waist dress with a wrap-over neckline and a flippy skirt). Clearly, these designers don't need any lessons about fabric and how to use it. What they still have to nail, though, is the art of making a concise statement without artsy trappings. Maybe if they weren't so anxious to prove themselves, it would flow more easily. They should relax, and make it simpler.

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LONDON, September 18, 2008

By Tim Blanks

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LONDON, September 18, 2008

By Sarah Mower

Luella

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LONDON, September 15, 2008

By Sarah Mower

On a day when fashion—make that everyone—could do with some cheering up, Luella Bartley did quite a brilliant job of perking up London's spirits. How that's possible in combinations of mauve, orange, and pink, executed in tweed, lace, and frills, doesn't quite translate to the written word. Yet once the girl got going with the boxy jackets, and the asymmetrical tiered frill skirts, and the big satin hair bows, and the net veils, and the pearl-chain handbags, and the tulle gloves, she had the audience smiling like the financial markets could take care of themselves for a moment.

"I wanted it to be a proper, ladylike character—but a bit psychedelic," Bartley said. "And I wanted color, but in a sort of sick way. When I saw it all lined up, I thought, Ew! Can we do this?" Good job she did, because her Spring collection was simply the most worked and accomplished she's ever done. True, Comme des Garçons, Marc Jacobs, and Vivienne Westwood may have passed by way of Chanel-ish tweeds, hyper-color, tacky-but-cool frilly trimmings, and mini-crinis, but Luella's unique angle on haberdashery is that it must end up flattering the girl. The little suiting pieces patchworked together from lavender tweeds and overlays of lace with their upstanding frills encircling the shoulder somehow made tweed look nonfrumpy—and possible to wear without the slightest air of irony. And when she does a dress, she knows what girls love: a bit of a prom number, but in this case with a nipped waist, a swathed top, a yoke to flatten the hips, and all kinds of bouncy tiers and rear peplum action switching along as she walks.

The fact that Bartley also incorporated the striped collegiate blazers that used to pop up at the beginning of her career and new versions of last summer's Liberty florals among the fan-pleated dresses was a smart commercial move—they liked it last time, here's the update. Everything else she had going on was a delicious step into girl-tempting newness: the pillboxes and hair accessories and the piled-on, mixed-up pearls and diamanté in the jewelry, as well as her clever transpositions of necklaces into shoulder-bag chains. Bartley herself—possibly because she's an ex-journalist and doesn't pretend to be anything other than an accessible mid-price designer—is quite offhand about the level of accomplishment it took to achieve all this. Still, it seems like a fitting time to remember that Bartley is part of the close-knit cohort of London designers, including Stella McCartney and Phoebe Philo, who have been coming into their own these past few years. She's often overlooked, but Bartley now deserves every bit as much credit as her friends in high places.