| NEW YORK
NEW YORK JPMorgan Chase & Co (JPM.N) will pay $797.5 million in cash to end all litigation brought on behalf the former Lehman Brothers Holdings Inc, whose September 2008 collapse triggered a global financial crisis. The settlement made public on Wednesday requires approval by U.S. Bankruptcy Judge Shelley Chapman in Manhattan.
It follows JPMorgan’s agreement last January to pay $1.42 billion in cash to resolve most other claims, in what had been an $8.6 billion lawsuit against the largest U.S. bank to recoup money for Lehman creditors. JPMorgan, which had been Lehman’s largest secured creditor, was accused of exploiting its leverage as Lehman’s main “clearing” bank to siphon critical liquidity in the last few days before Lehman went bankrupt on Sept. 15, 2008.
Lehman creditors have maintained that JPMorgan unnecessarily extracted billions of dollars of collateral, and by doing so obtained a windfall at their expense.
In a court filing, lawyers for Lehman said the settlement avoids the uncertainty of continued litigation and millions of dollars of additional legal fees, and is “in the best interests of the Lehman estate and its creditors.”
No one admitted wrongdoing, the settlement agreement said.
Creditors have recouped more than $110 billion, and bondholders once projected to receive just 21 cents on the dollar have recovered close to twice that sum.
(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)
Source: JPMorgan to pay Lehman $797.5 million to end litigation over collapse | Reuters
