Already a Bloomberg.com user?
Sign in with the same account.
(Updates with judge’s action in second paragraph.)
June 23 (Bloomberg) -- JPMorgan Chase & Co. will return $800 million in cash and securities belonging to customers of bankrupt Lehman Brothers Holdings Inc.’s brokerage under a settlement approved by a judge.
U.S. Bankruptcy Judge James M. Peck today approved the accord, struck in April between the second-biggest U.S. bank and the trustee liquidating the remains of the brokerage, Lehman Brothers Inc.
JPMorgan was the main clearing bank for the Lehman brokerage, processing billions of dollars of transactions and lending it tens of billions of dollars daily, according to court filings. While some loans were secured by securities in the brokerage’s accounts, the bank didn’t have a valid lien on the $800 million in customer property that is being returned, according to filings.
“Customer property held by the LBI estate available for distribution will increase by more than $800 million,” the trustee, James Giddens, said in an e-mailed statement today. “This is a significant and positive result from two years of investigation and close cooperation with JPMorgan.”
Consenting to return the assets in April, the bank said the settlement would have “no material financial impact,” as most of the assets had already been set aside to satisfy potential claims by the trustee.
Separately, JPMorgan is seeking dismissal of an $8.6 billion lawsuit by the Lehman parent.
The brokerage bankruptcy case is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
--Editors: Charles Carter, John Pickering
To contact the reporter on this story: Linda Sandler in New York at email@example.com.
To contact the editor responsible for this story: John Pickering at firstname.lastname@example.org.