Summary
JPMorgan Chase & Co. (JPM) announced on January 25, 2016, an agreement to settle two significant legal disputes with Lehman Brothers Holdings Inc. and its affiliates. The settlement, which requires Bankruptcy Court approval, involves claims related to the return of collateral and consequential damages, as well as disputes over derivatives transactions outstanding at the time of Lehman's bankruptcy. Under the terms of the agreement, JPMorgan Chase will pay $1.42 billion to Lehman. The company has stated that this settlement is not expected to have a material impact on its first-quarter 2016 earnings. A hearing to seek court approval is scheduled for February 8, 2016. This development resolves a long-standing legal challenge for JPMorgan Chase, allowing it to move past these legacy issues.
Key Highlights
- 1JPMorgan Chase reached a settlement agreement with Lehman Brothers Holdings Inc. and its affiliates on January 25, 2016.
- 2The settlement resolves two outstanding disputes, including Lehman's claims for $7.9 billion in collateral and billions in consequential damages.
- 3It also addresses claims related to approximately $2.4 billion concerning derivatives transactions post-Lehman's bankruptcy.
- 4JPMorgan Chase will pay $1.42 billion as part of the settlement.
- 5The settlement is subject to approval by the Bankruptcy Court, with a hearing scheduled for February 8, 2016.
- 6The company expects the settlement to have no material effect on its first-quarter 2016 earnings.