The Canadian Imperial Bank of Commerce said on Monday it saw no merit in a lawsuit filed against it by a special purpose vehicle controlled by U.S. private equity firm Cerberus Capital Management.
The lawsuit filed late last week in New York relates to an October 2008 transaction in which CIBC issued a limited recourse note to Cerberus which significantly reduced its exposure to the U.S. residential real estate market, during the depths of the financial crisis.
Cerberus alleges that CIBC had defaulted on certain payments and owes it additional payments of hundreds of millions of dollars.
CIBC says it had satisfied all its obligations by making 84 monthly payments totaling more than $1.24 billion. It claims Cerberus had accepted the payments without question and was now manufacturing a new interpretation of the deal.
CIBC said it had fully performed its obligations in respect to its agreement with Cerberus and believed Cerberus’ lawsuit was without merit.