Lehman Brothers Marks its Calendar for 2012 Trial
Lehman Brothers Holdings Inc.’s monstrous, multibillion-dollar trial against JPMorgan Chase & Company, will most likely begin in 2012—and not a day earlier. JPMorgan is being accused of ridding itself of billions of dollars in order to quickly file its, now historical, bankruptcy.
Lehman crumbled due to heavy overexposure to commercial real estate and “toss of the dice” assets such as subprime mortgages. At the time, the company had assets valued at over $639 billion. It was the largest company in the United States to declare bankruptcy, and consequently, their folding became a record-setting bankruptcy.
The lawsuit, which stems from this past May, says JPMorgan utilized its “unparalleled” knowledge of Lehman’s distress as a primary “clearing” bank for all Lehman transactions with other parties—to then dump nearly $8.6 billion of collateral, in the days preceding Lehman’s bankruptcy on September 15th, 2008.
It goes on to accuse executives such as JPMorgan Chief Executive Jamie Dimon, of taking this collateral, after secretly finding out from Federal Reserve Chairman Ben Bernanke and (at the time) US Treasury Secretary Henry Paulson, Lehman would not be bailed out by the government. JPMorgan, meanwhile and as expected, has, while on the defensive, denied all accusations and believes they’ve done nothing wrong.
Bankruptcy Judge James Peck, in Manhattan, approved the trial’s timeframe and Lehman’s attorney, John Quinn said he expects each side to utilize approximately 50 witnesses each. It has been projected research and depositions alone may not wrap up until June 30th…2011.
The Lehman attorney told Judge Peck, “It’s a complicated, large case.”
“Is it really going to take until sometime in 2012 for this case to be trial-ready?” The Judge asked. “We think that it will,” Quinn responded.
Peck then accepted the timeframe, adding much to the amusement of the courtroom, “at this point my calendar for 2012 is mostly open.”
This past March, Judge Peck authorized an accord in which JPMorgan would have to return a few billion dollars worth of assets to the Lehman estate. But this action concurrently allowed Lehman the right to sue further.Post Tags: Bankruptcy, bankruptcy protection