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Lehman October 2
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Most Lehman Claims to Billions Held by JPMorgan Thrown Out
Oct 1, 2015 | Bloomberg
By Bob Van Voris
A U.S. judge said he won’t rewrite contracts Lehman Brothers Holdings Inc. agreed to and threw out most of the bank’s claims to $8.6 billion taken as collateral by JPMorgan Chase Bank NA on the eve of Lehman’s 2008 bankruptcy. -
JPMorgan Beats Bulk Of $8.6B Lehman Collapse Suit
Oct 2, 2015 | Law360
By Kurt Orzeck
A New York federal judge on Thursday axed most of a suit in which Lehman Brothers Holdings Inc. accused JPMorgan Chase Bank NA of extorting an $8.6 billion “slush fund” through unjustified collateral demands in the frenzied days before Lehman’s demise. -
UPDATE 1-JPMorgan prevails in $8.6 bln Lehman creditor lawsuit
Oct 1, 2015 | Reuters
By Jonathan Stempel
JPMorgan Chase & Co prevailed in an $8.6 billion lawsuit brought on behalf of Lehman Brothers Holdings Inc creditors who said the bank abused its power by draining Lehman of critical liquidity in its final days, precipitating the global financial crisis. -
Judge Rules for J.P. Morgan in $8.6 Billion Lehman Lawsuit
Oct 1, 2015 | The Wall Street JournalA federal judge in New York granted a victory to J.P. Morgan & Co. in its $8.
By Patrick Fitzgerald
A federal judge in New York granted a victory to J.P. Morgan & Co. in its $8.6 billion legal fight with Lehman Brothers Holdings Inc.’s, rejecting the failed investment bank’s claim that J.P. Morgan illegally siphoned billions of dollars from Lehman before the bank’s collapse -
Bernanke, in new memoir, recalls Lehman's 'surreal' failure
Oct 1, 2015 | CNBC
Ben Bernanke recalls the September weekend in 2008 when regulators sought desperately but in vain to save the investment bank Lehman Brothers as a "terrible, surreal moment." -
In memoir, Bernanke recalls Lehman’s ‘surreal’ failure
Oct 2, 2015 | The Seattle Times
By Martin Crutsinger
Ben Bernanke recalls the September weekend in 2008 when regulators sought desperately but in vain to save the investment bank Lehman Brothers as a “terrible, surreal moment.” -
Becoming a `Lehman moment' is harder than it seems
Oct 1, 2015 | The Chicago Tribune
By Mark Gilbert
Ever since the 2008 demise of Lehman Brothers, the failed bank's name is evoked whenever a company, industry or market gets into difficulties. Google "Volkswagen Lehman Moment" and you'll generate 357,000 results in 0.55 seconds.
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JP Morgan Lawsuit
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Commentary
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Most Lehman Claims to Billions Held by JPMorgan Thrown Out
Oct 1, 2015 | Bloomberg
By Bob Van Voris
A U.S. judge said he won’t rewrite contracts Lehman Brothers Holdings Inc. agreed to and threw out most of the bank’s claims to $8.6 billion taken as collateral by JPMorgan Chase Bank NA on the eve of Lehman’s 2008 bankruptcy.
JPMorgan took advantage of its status as Lehman’s primary lender to unfairly extract cash and position itself ahead of other creditors in case of bankruptcy, the creditors said, claiming JPMorgan had “life or death” leverage. JPMorgan’s demand for the collateral helped force Lehman into insolvency, according to the bank’s creditors.
The judge’s decision on Wednesday was largely a win for JPMorgan in the five-year dispute, although some issues will have to be resolved at trial if no settlement is reached.
The bank cited its contracts with Lehman, saying it had no obligation to lend it money and there were no restrictions on the collateral it could demand. Lehman could’ve found someone else from whom to borrow, the bank had argued.
For Full Article: http://www.bloomberg.com/news/articles/2015-10-01/most-lehman-claims-to-8-6-billion-held-by-jpm-tossed-by-judge
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JPMorgan Beats Bulk Of $8.6B Lehman Collapse Suit
Oct 2, 2015 | Law360
By Kurt Orzeck
A New York federal judge on Thursday axed most of a suit in which Lehman Brothers Holdings Inc. accused JPMorgan Chase Bank NA of extorting an $8.6 billion “slush fund” through unjustified collateral demands in the frenzied days before Lehman’s demise.
U.S. District Judge Richard J. Sullivan, partially granting JPMorgan’s motion for summary judgment, held that contracts between the parties allowed the bank to stop extending credit to Lehman. JPMorgan’s demands conditioning extensions of credit on obtaining additional collateral weren’t wrongful, according to the judge.
The suit essentially blames JPMorgan for Lehman’s downfall. In the final days before Lehman filed for bankruptcy, the plaintiffs say, JPMorgan used its “life or death” leverage as Lehman’s primary clearing bank to extract desperately needed liquidity — including more than $5 billion in cash on the day before Lehman's collapse on Sept. 15, 2008 — as collateral to secure credit lines held by brokerage unit Lehman Brothers Inc.For Full Article: http://www.law360.com/articles/709793/jpmorgan-beats-bulk-of-8-6b-lehman-collapse-suit
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UPDATE 1-JPMorgan prevails in $8.6 bln Lehman creditor lawsuit
Oct 1, 2015 | Reuters
By Jonathan Stempel
JPMorgan Chase & Co prevailed in an $8.6 billion lawsuit brought on behalf of Lehman Brothers Holdings Inc creditors who said the bank abused its power by draining Lehman of critical liquidity in its final days, precipitating the global financial crisis.
In a decision made public on Thursday, U.S. District Judge Richard Sullivan in Manhattan rejected claims that JPMorgan exploited its "life or death" leverage as Lehman's main "clearing" bank to extract billions of dollars of collateral just before Lehman went bankrupt on Sept. 15, 2008.
Creditors said JPMorgan had no need for this despite volatile markets and extracted a windfall at their expense.
But the judge said JPMorgan was entitled to demand collateral to secure Lehman's obligations and did not defraud Lehman into providing it. He also said JPMorgan had no contractual obligation to extend credit to keep Lehman alive.
"That plaintiffs are now dissatisfied with the bargain they struck and believe that (JPMorgan) behaved badly in enforcing its terms is of no moment," Sullivan wrote.
For Full Article: http://www.reuters.com/article/2015/10/01/jpmorgan-lehman-idUSL1N1211OQ20151001
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Judge Rules for J.P. Morgan in $8.6 Billion Lehman Lawsuit
Oct 1, 2015 | The Wall Street JournalA federal judge in New York granted a victory to J.P. Morgan & Co. in its $8.
By Patrick Fitzgerald
A federal judge in New York granted a victory to J.P. Morgan & Co. in its $8.6 billion legal fight with Lehman Brothers Holdings Inc.’s, rejecting the failed investment bank’s claim that J.P. Morgan illegally siphoned billions of dollars from Lehman before the bank’s collapse.
Judge Richard Sullivan of the U.S. District Court in New York said J.P. Morgan didn’t abuse its leverage as Lehman’s primary clearing bank to force the investment bank to hand over more collateral in the weeks before its historic September 2008 collapse)
In a 31-page decision made available Thursday, Judge Sullivan said he rejected Lehman’s “fundamental premise” that J.P. Morgan “was obligated to extend credit to Lehman under its credit agreement.”
While the judge granted the bulk of J.P. Morgan’s summary judgment motion to dismiss Lehman’s claims, he said the investment bank could pursue its bid to subordinate J.P. Morgan’s claim to those of other creditors.
A J.P. Morgan spokesman said the bank was pleased with the ruling. A spokeswoman for Lehman’s postbankruptcy estate declined to comment.
For Full Article: http://www.wsj.com/articles/judge-rules-for-j-p-morgan-in-8-6-billion-lehman-lawsuit-1443722601
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Bernanke, in new memoir, recalls Lehman's 'surreal' failure
Oct 1, 2015 | CNBC
Ben Bernanke recalls the September weekend in 2008 when regulators sought desperately but in vain to save the investment bank Lehman Brothers as a "terrible, surreal moment."
"We were staring into the abyss," the former Federal Reserve chairman writes of the tense negotiations, led by Timothy Geithner, then head of the New York Fed, and Henry Paulson, then Treasury secretary.
Regulators hoped to find a buyer for Lehman and avert what would become the largest bankruptcy in U.S. history, which ignited the worst financial crisis since the Great Depression.
A "blur" is how Bernanke describes the events.
Bernanke recalls the episode in a memoir, "The Courage to Act: A Memoir of a Crisis and Its Aftermath," scheduled to be published Monday. The Associated Press obtained and bought an early copy.
Top executives of major banks took part in the marathon talks with regulators. Bernanke followed the talks from his Washington office, conferring on speaker phone with officials in New York, munching on sandwiches and taking catnaps on the burgundy leather sofa in his office.
For Full Article: http://www.cnbc.com/2015/10/01/the-associated-press-bernanke-in-new-memoir-recalls-lehmans-surreal-failure.html
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In memoir, Bernanke recalls Lehman’s ‘surreal’ failure
Oct 2, 2015 | The Seattle Times
By Martin Crutsinger
Ben Bernanke recalls the September weekend in 2008 when regulators sought desperately but in vain to save the investment bank Lehman Brothers as a “terrible, surreal moment.”
“We were staring into the abyss,” the former Federal Reserve chairman writes of the tense negotiations, led by Timothy Geithner, then head of the New York Fed, and Henry Paulson, then Treasury secretary.
Regulators hoped to find a buyer for Lehman and avert what would become the largest bankruptcy in U.S. history, which ignited the worst financial crisis since the Great Depression.
A “blur” is how Bernanke describes the events.
Bernanke recalls the episode in a 600-page memoir, “The Courage to Act: A Memoir of a Crisis and Its Aftermath,” scheduled to be published Monday. The Associated Press obtained and bought an early copy.
Top executives of major banks took part in the marathon talks with regulators. Bernanke followed the talks from his Washington office, conferring on speaker phone with officials in New York, munching on sandwiches and taking catnaps on the leather sofa in his office.
“All we can do is put foam on the runway,” Bernanke quotes Geithner as saying, describing measures to prevent a fire after a jet crash
For Full Article: http://www.seattletimes.com/business/in-memoir-bernanke-recalls-lehmans-surreal-failure/
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Becoming a `Lehman moment' is harder than it seems
Oct 1, 2015 | The Chicago Tribune
By Mark Gilbert
Ever since the 2008 demise of Lehman Brothers, the failed bank's name is evoked whenever a company, industry or market gets into difficulties. Google "Volkswagen Lehman Moment" and you'll generate 357,000 results in 0.55 seconds. Do the same for "Glencore Lehman Moment," and the search engine will deliver 144,000 items in 0.49 seconds. So I propose applying the following criteria to judge whether the label is warranted the next time there's a financial car crash:
- It isn't a Lehman Moment if people are calling it one.
The very fact that we can discussVolkswagenand Glencore as potential Lehman Moments proves that they don't qualify. As well as killing its victim, the disaster has to be swift and unanticipated. It can't be Wile E. Coyote dashing off the cliff and levitating for a while until he looks down; only "here today, gone tomorrow" events count. Volkswagen has slowed production, but its 600,000 workers still have jobs; Glencore's travails were evident to anyone who bothered to look at a chart of commodity prices. Those images of shellshocked Lehman employees carting boxes of belongings out of the building won't be repeated.
- It isn't a Lehman Moment unless somewhere in Germany there is a Landesbank up to its neck in trouble.
The technical financial term is a "stuffee" -- that special customer who will buy anything and everything their investment bank salesperson waves under their nose. Talk to any bank salesperson, and they'll confirm that the name of that special customer almost always ends with the word "Landesbank," with the result that these banks have an incredible track record of being on the wrong side of every bad trade. When Wall Street was peddling dodgy mortgage bonds, the Landesbanks were eager buyers-- requiring a bailout that cost the German government 97 billion euros ($108 billion) in state aid and guarantees. So a true Lehman Moment must inflict pain on one of Germany's state- owned regional banks. On that score, you have to bet that Volkswagen is almost definitely eligible.
For Full Article: http://www.chicagotribune.com/news/sns-wp-blm-lehman-comment-66fb3316-6837-11e5-bdb6-6861f4521205-20151001-story.html
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Bernanke Book
Commentary
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