FOX Business News reports that a JP Morgan senior bank official has called the Lehman Brothers suit a 'total waste of f-----g time."
The report says:
JP Morgan has a pretty simple plan to defend itself against charges that it caused the bankruptcy of Lehman Brothers and owes the firm's estate billions of dollars in damages. "We are going to be really f-----g aggressive with this case because this is a total waste of f-----g time!"
Those are the fighting words of a senior bank official, who spoke to FOX Business Network on the condition of anonymity just a day after JP Morgan was sued by the remnants of the Wall Street firm, which filed for bankruptcy in 2008 and then set the stage for the broader meltdown of the entire financial
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(AP) NEW YORK — The estate of Lehman Brothers Holdings Inc. claims that JPMorgan Chase & Co. helped drive Lehman into bankruptcy by forcing it to give up billions of dollars in cash reserves that it otherwise could have used to stay afloat.
The Lehman estate alleges in a lawsuit filed Wednesday that JPMorgan forced the now-failed bank to put up collateral that sapped Lehman of cash that, at the least, would have enabled it to wind down operations in an orderly process.
Lehman filed for bankruptcy in September 2008, helping spark one of the worst financial crisis since the Great Depression. It was the largest bankruptcy filing in U.S. history.
JPMorgan spokesman Joe Evangelisti said, "the lawsuit is ill-conceived and meritless." JPMorgan will defend itself against the claims, he added.
A bankruptcy examiner's report of Lehman's failure, which was released in March, pinned the blame for Lehman's collapse on Lehman and some of its top executives for taking too much risk and misrepresenting the bank's financial health.
JPMorgan served as Lehman Brothers' clearing agent, which means it acted as an intermediary between Lehman and its trading partners. In that role, Lehman said JPMorgan used inside knowledge of the bank to "siphon billions of dollars" through a series of "one-sided agreements," according to the lawsuit filed in bankruptcy court in New York.
The lawsuit alleges that JPMorgan threatened to stop providing its clearing services if Lehman didn't provide more collateral to protect JPMorgan from risks tied to serving as a bridge for Lehman and its trading partners. Lehman said without JPMorgan acting as a clearing agent, it would have immediately been forced into bankruptcy.
Evangelisti said JPMorgan provided more than $100 billion in credit to Lehman on a daily basis while acting as the bank's clearing agent. JPMorgan continued to provide Lehman with credit even through its bankruptcy proceedings.
Aside from the increased collateral requirements, Lehman claims JPMorgan forced it into agreements that would put JPMorgan ahead of other creditors should the bank fail.
Lehman claims the $8.6 billion in cash collateral it had to provide JPMorgan during its last four days of operations was billions of dollars more than was truly needed to protect JPMorgan from potential losses.
The lawsuit says JPMorgan should return the extra cash so it can be paid out to other creditors that are still owed money from the bankruptcy proceedings.