Cerberus Capital Management has issued a statement defending the lawsuit filed against the Canadian Imperial Bank of Commerce last week. Cerberus said it “provided CIBC the lifeline that it needed” during the financial crisis in 2008, but that CIBC “refused” to observe its contractual obligations. Cerberus added that it was “forced” into legal action following efforts to resolve the issue with CIBC. The bank sought the financial assistance from Cerberus to reduce its exposure to the U.S. residential real estate market. It said it had satisfied all its obligations by making payments totaling more than US$1.24 billion, according to a Reuters report.
Cerberus Capital Management Statement Regarding Canadian Imperial Bank of Commerce (CIBC) Litigation
NEW YORK, Nov. 3, 2015 /PRNewswire/ — Cerberus Capital Management, L.P. (“Cerberus”) today issued the following statement from Mark Neporent, the firm’s Chief Operating Officer, General Counsel and Senior Managing Director, regarding a lawsuit filed Friday alleging that Canadian Imperial Bank of Commerce (“CIBC”) (TSX: CM) (NYSE: CM) has defaulted on its loan agreements with Cerberus:
“An affiliate of Cerberus Capital Management, L.P. provided CIBC the lifeline that it needed during the financial crisis in the fall of 2008. CIBC publicly touted the benefits of that investment and cited the transaction to quell market concerns relating to its high risk real estate-related assets. Now that CIBC has received the benefits of that investment and both the economy and its performance have improved, CIBC has refused to live up to the clear and unambiguous contract terms, drafted by CIBC and its counsel.
“Cerberus did not file this lawsuit lightly; it was forced to do so in order to recover the contract payments owed to it by CIBC. Cerberus has sought to resolve its dispute with CIBC for years, and only filed this lawsuit after CIBC refused to engage in any meaningful discussions regarding its contractual obligations.
“CIBC’s attempt to rewrite history by asserting in a press release that the Complaint reflects a ‘manufactured,’ after-the-fact interpretation of the contract documents is without merit in fact or law. The relevant documents are clear, unambiguous and reflect the parties’ intentions and expectations. Cerberus is merely seeking to enforce the plain language of the contract documents and hold CIBC responsible for its obligations. Cerberus is confident that the court will interpret and enforce the contracts precisely as the parties agreed and memorialized in their agreements.”
About Cerberus Capital Management, L.P.
Established in 1992, Cerberus Capital Management, L.P. is one of the world’s leading private investment firms. Cerberus has more than US $25 billion under management invested in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments. From its headquarters in New York City and large network of affiliate and advisory offices in the US, Europe and Asia, Cerberus has the on-the-ground presence to invest in multiple sectors, through multiple investment strategies in countries around the world.
Peter Duda: +1 (212) 445-8213
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Cerberus Media Line: +1 (212) 891-1558
Photo courtesy of Reuters/Mark Blinch