* Settlement ends litigation over disputed CDO
* Payment equals $110.3 million after taxes
* Lehman repaying creditors $65 bln after exiting bankruptcy
Dec 31 Canadian Imperial Bank of Commerce
said it would pay $149.5 million to the estate of Lehman
Brothers Holdings Inc to resolve litigation over a
collateralized debt obligation tied to the bankruptcy of the
former Wall Street bank.
In a statement on Monday, Canada's fifth-largest bank said
the million payment was equal to $110.3 million after taxes.
CIBC said it had previously recognized a gain of $841
million following Lehman's Sept. 15, 2008, bankruptcy, when it
had reduced to zero its financial commitment related to a note
issued by the CDO.
On Sept. 14, 2010, Lehman had sued CIBC and dozens of other
defendants to recover more than $3 billion that it said it had
been deprived of as a result of the Chapter 11 filing.
Lehman contended it had contracts that gave it senior
payment priority on various derivatives and collateralized debt
obligations, but that the bankruptcy caused this to be
improperly replaced with junior payment priority.
It sought to hold CIBC responsible for a large portion of
the more than $1.3 billion due under an agreement requiring it
to cover payment shortfalls tied to a CDO transaction.
A Lehman spokeswoman had no immediate comment on the CIBC
Once Wall Street's fourth-largest investment bank, Lehman
emerged from bankruptcy protection on March 6 and has paid out
roughly half of the estimated $65 billion it hopes to return to
creditors. Its bankruptcy is by far the largest in U.S. history.
The case is Lehman Brothers Special Financing Inc v. Bank of
America NA et al, U.S. Bankruptcy Court, Southern District of
New York, No. 10-ap-03547. The main bankruptcy is In re: Lehman
Brothers Holdings Inc in the same court, No. 08-13555.