Lehman Brothers, the bankrupt Wall Street investment bank, may return hedge-fund assets in Europe that were frozen when the firm collapsed last autumn as soon as next year, media reports said.

PricewaterhouseCoopers, Lehman Brothers International Europe’s administrator, plans today to ask a UK court to block any creditor claims for assets after this year, the accounting firm said in a statement. That would allow PwC to return money Lehman had held in trust for fund managers as soon as the first quarter of 2010.

About 700 hedge funds and investment firms lost control of $23 billion in assets when Lehman filed for bankruptcy on 15 September.

The demise of Lehman Brothers – the biggest bankruptcy of its kind in history – has hit the wealth management industry in several ways: the freezing of hedge fund assets and the worries the bankruptcy caused about the counterparty risks underlying structured products. Lehman Brothers was a large player in the structured products industry.

Media reports said the affected funds were clients of the European unit’s prime brokerage in London. MKM Longboat Capital Advisors, based in London, closed its $1.5 billion Multi-Strategy fund after assets were stuck in Lehman. GLG Partners said at least $95 million in trades were locked up.

More than 75 per cent of the creditors will have to back the plan in an October vote for it to become effective, PwC said. If they block the plan, they could face an additional nine-month wait while the administrator devises an alternative.