JPMorgan Chase & Co and the remnant of Lehman Brothers Holdings Inc. have reached settlement of the remaining litigation on Wednesday, Feb. 1. In the agreed settlement, JPMorgan will pay Lehman $797.5 million in 2008 bankruptcy case.
According to Bloomberg , JPMorgan and its affiliates have agreed to pay the remaining litigation left in the bankruptcy case of Lehman Brothers Holdings Inc. in 2008. Prior to the recent agreement, JPMorgan have paid $1.42 billion in two major litigation to Lehman last year. With additional fund from the settlement, Lehman has been able to make payment to its creditor $1.49 billion.
“We are pleased to have resolved Lehman’s remaining claims,” a JPMorgan spokesman Brian Marchiony told the press after the recent settlement was agreed.
The recent agreement will be subject of approval from U.S. Bankruptcy Court. According to Securities and Exchange Comission the hearing has been scheduled on Feb. 16. with Judge Shelley Chapman to preside the case.
According to lawyer for Lehman, as reported by Wall Street Journal, the settlement has finally resolved all disputes between Lehman and JPMorgan. In the filing to U.S. Bankruptcy Court in New York, legal representative for Lehman said that after the final settlement, Lehman will be able to distribute $800 million payment to its creditors. It also avoids the uncertainty and reached for the best interests of the creditors.
Lehman was once the fourth-largest bank in the U.S. before filing a bankruptcy in September 2008. The case was recorded as the biggest bankruptcy case in the history with $613 billion in debt.
At that time, JPMorgan was the clearing bank for Lehman, providing cash advance to facilitate overnight repurchase. JPMorgan provided up to $100 billion cash a day for the Lehman’s overnight transaction.
Following the settlement of $797.5 million, Lehman has agreed to drop objection to Tassimo claims filed against JPMorgan. Lehman filed the $30 billion claims which related to its losses after the bankruptcy.
Watch the report regarding the total amount of more than $1.42 billion which JPMorgan had to pay last year to settle claims from Lehman below:
