Thornburg Mortgage Seeks $2 Billion From JPMorgan, Citigroup

JPMorgan Chase & Co., Citigroup Inc. and three other banks helped to push Thornburg Mortgage Inc. into a “free-fall” bankruptcy, the insolvent firm’s trustee said in a lawsuit seeking to recover $2 billion for creditors.

After making “unjustified” margin calls, the banks extracted more than $700 million of margin and interest payments from Thornburg, then sold their collateral and left the company to file for Chapter 11 protection during the credit crisis in May 2009, trustee Joel Sher said in an April 30 filing in U.S. Bankruptcy Court in Baltimore.