Lehman Judge Won’t Redo JPMorgan $8.6 Billion Suit Ruling
Stock Chart for Lehman Brothers Holdings Inc (LEHMQ)
Lehman Brothers Holdings Inc. lost a bid for a revised ruling on its $8.6 billion lawsuit against JPMorgan Chase & Co. (JPM) when the judge said he was satisfied with the way he had dealt with the issues.
U.S. Bankruptcy Judge James Peck in April dismissed some of the defunct investment bank’s claims, leaving others in place. Lehman, which is gathering money for a second payment to creditors, said it might gain hundreds of millions of dollars if he reinstated some claims he dismissed. Peck declined in an order signed yesterday.
In a July 12 hearing, Peck told Lehman it had other ways of recovering money from JPMorgan.
“I see absolutely no reason now to revisit the questions,” Peck said, according to a transcript.
Lehman alleges that the New York-based lender helped cause its 2008 collapse by demanding $8.6 billion in collateral. JPMorgan said in February it would give Lehman almost $700 million to settle part of the suit. It continues to fight most of Lehman’s claims.
The two parties also are fighting over a demand by JPMorgan, a key lender to Lehman in the 2008 credit crisis, for $6.3 billion it says it is owed. Peck said at the hearing this fight was one of the ways for Lehman to recover money from the bank.
Peck’s April ruling was that Lehman cannot claim money from JPMorgan for securities transactions governed by so-called safe harbor law, devised to protect banks dealing with weak companies. Lehman is entitled to pursue the remaining “fact driven causes of action,” he said.
Lehman filed the biggest bankruptcy in U.S. history in September 2008, listing $613 billion in debt. Now out of bankruptcy, it has said it expects to pay creditors 18 cents on the dollar by 2016 or so.
Kimberly Macleod, a Lehman spokeswoman, declined to comment immediately on Peck’s decision.
To contact the reporter on this story: Linda Sandler in New York at firstname.lastname@example.org.