CIBC agrees to pay US$149.5M to settle 2010 claim by Lehman Estate
A CIBC sign is seen
The Canadian Press
Published Monday, December 31, 2012 9:54AM EST
TORONTO -- CIBC (TSX:CM) has agreed to pay US$149.5 million to settle a claim with the Lehman Estate, which was set up after the collapse of a onetime Wall Street giant.
The claims were filed against CIBC and numerous other financial institutions in September 2010, two years after the venerable investment bank Lehman Bros. went bankrupt.
The firm's collapse was part of a credit crunch linked to the U.S. housing and mortgage industries and made worse by the use of complex financial instruments.
The estate claimed CIBC was obliged honour a commitment made under one of those agreements before the collapse.
The Toronto-based bank originally reduced its obligation to zero and recognized a US$841 million gain after Lehman filed for bankruptcy in September 2008.
The collapse of a firm that had been considered too big to fail sent shock waves through the global financial industry and contributed to the 2008-09 recession.