Lehman Brothers to sue JPMorgan Chase

by Rachael Singh

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27 May 2010

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Collapsed bank Lehman Brothers has filed a lawsuit against its former short-term lender, JPMorgan Chase, alleging the lender contributed to its failure.

Lehman Brothers, which filed for administration at the end of 2008, is seeking $8.6bn (£5.93bn) from JPMorgan. The bank claims JPMorgan seized the money as collateral in the days leading up to its collapse the Financial Times reported.

Lehman Brothers filed the lawsuit in Manhattan New York this week said JPMorgan used its "unparalleled access" to demand the cash four days before Lehman's collapsed.

"With this financial gun to Lehman's head, JP Morgan was able to extract extraordinarily one-sided agreements from Lehman literally overnight," the bank said in the complaint.

"Those billions of dollars in collateral rightfully belong to the Lehman estate and its creditors."

JPMorgan has called the lawsuit "ill-conceived".

Further reading:

Lehman investigation blocked by US-EU regulator stand-off

PwC's Lehmans fees top £210m

Lehman Brothers accused of using front company

Lehman collapse contributed to IASB funding issues

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