The administrators of Lehman Brothers International Europe (LBIE), PricewaterhouseCoopers (PwC), continue to try to formulate a speedy and viable process for returning hedge fund client assets.  After a proposed scheme of arrangement (Scheme) was rejected by the High Court in London, PwC unveiled a contractual solution (Solution) as an alternative to the proposed Scheme.  PwC said in a statement that the Solution would allow them to distribute “a very significant portion” of the $8.9 billion in assets currently under their control directly to creditors.  According to PwC, the Solution offers substantially the same terms to investors as the Scheme.  The key difference is that the contracts by which the Solution would be effectuated do not need court approval.  LBIE is the U.K. broker-dealer affiliate of Lehman Brothers Holdings Inc., and served as a prime broker to various hedge funds.  On September 15, 2008, LBIE was placed into administration in the U.K.  The U.K. court appointed several PwC partners as joint administrators of the LBIE estate.  When LBIE collapsed, the assets of its hedge fund clients were frozen.  In the intervening year and change, those hedge funds clients have endured a long and tortuous process in an effort to retrieve their assets.  For more on the LBIE Scheme, see “How Can Hedge Funds Get Their Money Out of Lehman Brothers International Europe?,” Hedge Fund Law Report, Vol. 2, No. 31 (Aug. 5, 2009).  This article aims to help hedge fund managers with assets tied up in the LBIE administration determine whether or not to participate in the Solution.  To do so, the article examines: the mechanics of the Solution; the mechanics of the Scheme; how net equity claims would be computed and valued under both the Solution and the Scheme; recourse available to LBIE clients that participate in the Solution but disagree with valuations of claims; timing and mechanics of distribution of assets under the Solution; effect of the Solution on non-participating creditors; and the primary benefits and drawbacks to hedge funds of participating in the Solution.