When Lehman Brothers declared bankruptcy we joked that the firm could probably save a lot of money by shutting down the trippy electronic billboard lights on the front of its Seventh Avenue headquarters. As it turns out, however, Lehman’s lights almost did go out in London.
The Times of London is reporting that EDF, the French energy company, saw the bankrutpcy of Lehman as an opportunity to void the firm’s contract for electricity and put in place a pricier deal. At one point they gave Lehman just 38 minutes to respond to an email or risk having the electricity turned off.
From the Times:
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.