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Lehman creditors want probe of JPMorgan Chase role

Redheaded Stepchild
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10/03/2008 08:52 PM
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Lehman creditors want probe of JPMorgan Chase role
[link to www.chron.com]

Lehman creditors want probe of JPMorgan Chase role

Lehman Brothers Holdings Inc. creditors asked for court permission to investigate claims JPMorgan Chase & Co. may have contributed to the liquidity crisis that led to Lehman's collapse.

Three days before Lehman filed the biggest bankruptcy in history it had more than $17 billion in cash and securities at JPMorgan. Rather than allow Lehman access to the assets on Sept. 12, the bank "froze" Lehman's account, the creditors' committee said in a filing Thursday in U.S. Bankruptcy Court in Manhattan.
Lehman "suffered an immediate liquidity crisis that could have been averted by any number of events, none of which transpired," the creditors' committee said.

The unsecured creditors' panel is seeking court permission to interview a witness, request documents from JPMorgan and pursue possible legal claims. JPMorgan, the biggest U.S. bank by deposits, is Lehman's largest secured creditor, with an estimated claim of $23 billion, according to a Sept. 25 court filing.

Colette Campbell, a spokeswoman for JPMorgan in London, referred calls to Brian Marchiony in New York. Marchiony didn't immediately return an e-mail message or a voicemail left before normal business hours on his office phone.

Lehman, once the fourth-largest U.S. investment bank, filed the largest bankruptcy in history on Sept. 15 with total debts estimated at $613 billion as of May 31.

JPMorgan's "refusal to make those assets available to LBHI and its subsidiaries in the days leading up to LBHI's bankruptcy filing may have contributed to LBHI's liquidity constraints," the committee said in the filing.

The creditor panel includes Bank of New York Mellon Corp. and Wilmington Trust Co. as trustees for bondholders owed about $127.6 billion, according to court papers. Shinsei Bank Ltd., Mizuho Corporate Bank Ltd., Royal Bank of Scotland Plc, MetLife Inc. and R.R. Donnelley & Sons Co. are the other members of the committee, which acts for thousands of the bankrupt securities firm's unsecured stakeholders.

The committee is represented by Quinn, Emanuel, Urquart, Oliver & Hedges LLP in the matter.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

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10/03/2008 08:53 PM
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Re: Lehman creditors want probe of JPMorgan Chase role
Lehman creditors want probe of JPMorgan Chase role
 Quoting: Redheaded Stepchild

So do I.