Collapsed financial services firm Lehman Brothers Holdings Inc. (LBHI) – once the fourth largest investment bank in the US – has filed a lawsuit against Wall Street giant JPMorgan alleging that the company caused unnecessary difficulties during LBHI’s bankruptcy. It is also alleged that as part of this, JPMorgan persuaded LBHI to grant them access to billions of dollars in collateral.
LBHI collapsed at the start of the financial crisis in September 2008, using JPMorgan as the closing company to oversee their bankruptcy procedures. The company claims that they were coerced by JPMorgan into signing documents agreeing to grant the firm access to collateral. According to the lawsuit:
“JPMorgan not only took billions of dollars more than it needed from LBHI, but also accelerated LBHI’s free fall into bankruptcy by denying it an opportunity for a more orderly wind-down, costing the LBHI estate tens of billions of dollars in lost value,”
Speaking in response to the allegations and with all the confidence of a robust professional indemnity policy, JPMorgan has issued a statement saying:
“The lawsuit is ill-conceived and meritless, and we will vigorously defend it,”