Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / JPMorgan to return $861 mn to Lehman brokerage
BackBack

JPMorgan to return $861 mn to Lehman brokerage

JPMorgan to return $861 mn to Lehman brokerage

Premium

New York: JPMorgan Chase & Co will return more than $800 million of cash and securities to resolve claims by the trustee for Lehman Brothers Holdings Inc’s brokerage after the sides agreed how best the assets should be distributed to customers.

James Giddens, the court-appointed trustee for the bankrupt brokerage, called the settlement “a milestone" in his efforts to recover money for the customers.

JPMorgan was the brokerage’s “clearing" bank, in which it acts as a go-between in Lehman dealings with other parties and, in that role, held various of its assets, court papers show.

In a filing with the US bankruptcy court in Manhattan, Giddens said the accord “would substantially increase the fund of customer property" available for distribution, “without the uncertainty and delay of litigating disputed claims."

The assets include $755 million of cash and about $106 million of securities, the filing said. Court approval is needed for the settlement.

“This is the biggest affirmative settlement we have had for customers" and “several thousand" of them could ultimately share in proceeds, James Kobak, a partner at Hughes, Hubbard & Reed LLP representing the trustee, said in an interview.

JPMorgan, the second-largest US bank, said in a statement the main source of the returned assets will be from funds that the bank had set aside pending a resolution with the trustee.

The settlement will have no material financial impact on JPMorgan, the New York-based bank said.

“We worked closely with the trustee and determined the assets belonged with the the customer claimants," JPMorgan spokesman Joe Evangelisti said.

Giddens gets his powers through the Securities Investor Protection Act, a 1970 law designed to protect customers of failed brokerages.

Once the fourth-largest US investment bank, Lehman filed for Chapter 11 protection on 15 Sept. , 2008, in what remains by far the largest bankruptcy in US history.

Lehman’s parent separately sued JPMorgan, accusing it of taking advantage of inside details it learned as a clearing bank to extract $8.6 billion of desperately needed assets in the last few days before the bankruptcy.

The case is In re: Lehman Brothers Inc, US Bankruptcy Court, Southern District of New York, No. 08-01420.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 22 Apr 2011, 11:17 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie