Lehman Brothers Holdings Inc (OTC:LEHMQ) will pay JP Morgan Chase & Co (NYSE: JPM) $557 million in cash and allow the bank to keep $7.7 billion in collateral to settle many of the bank’s claims in Lehman Brothers bankruptcy case.
JP Morgan, which is currently the second largest bank in the United States in terms of assets, will transfer some illiquid securities back to Lehman that have a face value of about $9 billion which it is holding as collateral, according to a new court filing made in New York yesterday.
The settlement between the two companies is subject to approval from the court. Lehman Brothers, which filed the largest bankruptcy in United States history back in 2008, said that the filing is not certain about the actual market value of the securities that are being returned.
Lerhman spokeswoman Kimberly Macleod said in a statement that “The settlement allows Lehman to more efficiently manage billions of dollars worth of its illiquid assets thereby maximizing the return on those assets for the benefit of its creditors,”
She continued, “The parties to the settlement have reserved all rights with respect to claims they have against each other.”
