Canadian Imperial Bank of Commerce and its insurers tentatively agreed to pay $10.2 million to settle a 2005 U.S. lawsuit filed by two former employees over a money-losing company investment fund, according to court papers.
In a Delaware Chancery Court complaint, James Forsythe and Alan Tesche contended the bank failed to properly oversee the $561 million CIBC Employee Private Equity Fund (U.S.) Inc.
“The parties agree that the settlement consideration constitutes fair, adequate and reasonable consideration for the settlement of all claims,” lawyers for the employees and the bank said in court documents. Judge J. Travis Laster will rule on fairness of the agreement at a hearing in Wilmington Oct. 26, according to an order signed today.
The lawsuit alleged that Toronto-based CIBC officials wasted millions due to “willful and wanton lack of supervision of the fund’s management.” The company reported almost $12 billion in revenue last fiscal year.
The settlement money, minus as much as $3 million in plaintiffs’ legal fees and expenses, will be deposited in the fund, court papers show.
The case is Forsythe v. CIBC, CA1091-N, Delaware Chancery Court (Wilmington).