(Reuters) – Lehman Brothers Holdings Inc (LEHMQ.PK) and a group of unsecured creditors on Wednesday sued JPMorgan Chase & Co (JPM.N) for more than $5 billion, accusing the bank of siphoning billions of dollars of critically-needed assets, and hastening its bankruptcy.
“With this financial gun to Lehman’s head, JPMorgan was able to extract extraordinarily one-sided agreements from Lehman literally overnight,” the complaint said. “Those billions of dollars in collateral rightfully belong to the Lehman estate and its creditors.”
The lawsuit seeks to recover $5 billion, representing collateral posted just before the bankruptcy, plus interest and other remedies.
JPMorgan spokesman Joe Evangelisti called the lawsuit meritless, referring to a report by Lehman’s bankruptcy examiner Anton Valukas.
“As the examiner’s report makes clear,” he said, “it was the ill-advised decisions of Lehman and its principals to take on perilous leverage, and to double down on subprime mortgages and overpriced commercial real estate, and not conduct by our firm, that led to Lehman’s demise.”
The case is In re: Lehman Brothers Holdings Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.