The administrator for Lehman Brothers is drawing up a plan to give $17 billion (£10.6 billion) of the defunct bank’s assets directly to creditors.

The original application by PricewaterhouseCoopers’ (PwC) to implement a scheme to return assets was turned down by the High Court at the end of August. Pending an appeal this month, PwC is drawing up a “plan B” to return billions of dollars of assets to hedge funds and other investors by coming to a contractual agreement with the bank’s creditors.

A PwC spokesman said: “At the moment we have been able to return about $13 billion of $30 billion on a claim-by-claim basis, but this process will take a lot of time. We are getting people to sign up for contracts, instead. We are looking to return house assets — such as shares — that Lehman were holding on behalf of hedge funds and the like, and to get people to come forward and tell us what they are owed, so we can sort out the mess.”

The High Court turned down PwC’s initial scheme because it found there was no jurisdiction that could bind dissenting creditors to the agreement.

The scheme will represent only a small part of the efforts to sort through the ruins of Lehman, which filed for Chapter 11 bankruptcy protection in the United States and fell into administration in Britain and continental Europe in September last year.

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