UK
If the misfortune of selecting Lehman Brothers as your employer straight out of an expensive MBA course weren’t enough to deal with, some members of Lehman’s associate class of 2008 say they’re now being stung for the $40k sign-on bonus the bank paid them when they arrived.
The requests are allegedly coming from PricewaterhouseCoopers, which is administering Lehman’s estate in the UK. “More than 60% of my class received this letter around two weeks ago,” says one former Lehman associate. “We’re seeking legal opinions on whether we have to pay it back.”
Another member of Lehman’s 2008 associate class alleges that the claims aren’t simply for the sign-on itself, but include interest payments and an increment for the depreciation of the pound.
PWC was unable to immediately comment on the veracity of the claims.
One associate admits that the structure of the payment left open the possibility of claiming it back in certain circumstances. “It was structured as a forgiveable loan – if we worked at Lehman for more than a year and didn’t quit or weren’t fired, we could keep it. If not, we’d have to pay it back.”
Given they only worked at Lehman for six weeks before the bank went under, and were then cast adrift with no income and a large MBA loan to support, the decision to retrieve the cash seems a little harsh.
Elaine Aarons, a partners who acts for senior executives at law firm Withers, says PWC might be able to extract the money from the unfortunate associates if the contracts were worded so that the loans were repayable if they simply weren’t in employment with Lehman 12 months on.
“Whilst it may seem unreasonable on a common sense basis to have to repay something that you’ve probably already spent when you have done nothing wrong, it’s not impossible that on a strict reading of the contract events have triggered the conditions in which a repayment would occur.”
If the wording in the contract is vague, Aarons says the benefit of the doubt will probably lie with the associates: “Any ambiguity is usually construed in the individual’s favour.”
pocket change to probably pay for procrastination sessions and alcohol fueled training and “team” building days. such a shame they want to push people further into debt
there is no allegedly about it.these letters did arrive..and at the bottom in the smallest of print it also says that assocites may also be liable for not only this sum but might be charged for the admin in asking for these sums to be repaid and also for the cost of monies used for pre engagement reference checks and the associated costs pre employment like
1. the provision of security passes
2.a percentage of gym membership dues..tho not used they were part of the contractual package
3.the staff xmas party…the deposits had already been paid and are potentially due from associates
4 repayment of xmas related goods ( turkeys had been preordered and paid for
5.repayment of costs associted with initial engagement “various”..lift fobs, business cards ,executive washroom keys etc
the list goes on…does anyone else have anything different on their letters ?
Nice work PwC.
I am a 2008 Lehman Associate, and have not received any letter. What criteria are they using, or am I due for one soon? Is everyone getting one?
ha ha ha makes me laugh – if you were silly enough to join Lehman 6 weeks before they went bust (when the share price was 95% down YTD) then you really didnt learn much during your MBA course about default risk…
How many are we talking about
couldn’t they have modified the contracts to read instead that if they were terminated for cause or resigned they forefit the ‘loan’.
is this for associates only?
still@lehman: you’re a moron. we all saw what was happening to the firm but had to adhere to our offer or our schools would shut us out of future recruiting/alumni networks. No one had that money to repay as well, since the majority of us used it towards our loans. And most thought the firm would be saved, similar to Bear. Oops.
epic fail
still@lehmann, I’d like to work for whatever remaining parts of the company are still in existence: I’m thinking about B-school and would like the bragging rights of working at lehman AFTER it died……I’m a psych major with EQR internship experience, and I will be taking a more conventional approach to getting an I-Banking job after b school. Until then, I’m looking for the most unusual positions possible, just to get exposure (and plus I’m the first in my family to NOT do Marine Corps: I need something big to justify my existence).
For real though, I am the deranged workaholic that you want working for you.
they should definitely pay it back. it is owed to the Lehman creditors.
these people were given the money, and at the time it was clearly documented that this may need to be repaid.
to say that they shouldn’t have to pay it back is almost as absurd as the Irish suggesting that France owe them a replay.