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Tags: Geithner | Testify | JPMorgan | Lehman

Geithner Should Testify in JPMorgan Suit, Lehman Says

Friday, 17 February 2012 03:25 PM EST

U.S. Treasury Secretary Timothy Geithner should to be ordered to give a deposition in Lehman Brothers Holdings Inc.’s lawsuit against JPMorgan Chase & Co., which alleged the bank siphoned $8.6 billion out of Lehman in the 2008 credit crisis, helping to cause its collapse, the defunct firm and its creditors said.

Lehman has a March 16 deadline for completing its fact finding in the case, after interviewing more than 200 witnesses, creditors said in a filing in U.S. District Court in Washington. Lehman is asking a federal judge to order Geithner to be interviewed by lawyers for the firm and its creditors. The Treasury Department “has for many months delayed and ultimately refused to allow the testimony of Secretary Timothy F. Geithner,” which is key to the case, they said.

The filing, e-mailed to Bloomberg, was confirmed by a Lehman official who declined to be named. The filing was made in person, the official said. It couldn’t be immediately confirmed in court records.

Geithner, at the time president of the Federal Reserve Bank of New York, discussed the collateral JPMorgan was demanding for its loans with Richard Fuld and James Dimon, Lehman’s and JPMorgan’s chief executive officers, in the week before Lehman’s bankruptcy, according to the filing. He also met with Dimon and Henry Paulson, then Treasury Secretary, to discuss “concerns” that Dimon was using the crisis to strengthen his bank at Lehman’s expense, they said.

Treasury Refusal

The Treasury also has refused to let Paulson testify, creditors said. They would address the refusal separately, they said. Lehman’s official committee of creditors works closely with the defunct firm on its plans and lawsuits, it has said.

Anthony Coley, a Treasury Department spokesman, did not immediately return a phone call and e-mail message seeking comment on the filing. Joseph Evangelisti, a JPMorgan spokesman, didn’t immediately respond to an e-mail seeking comment on Lehman creditors’ account of Dimon’s conversations with officials.

Lehman and JPMorgan this week got a judge’s approval to settle a $699 million dispute, with the bank returning that amount of the $8.6 billion to Lehman. In addition to the lawsuit, they are fighting over $6.3 billion in claims that the bank filed against the defunct firm.

The biggest U.S. bank, which lent $70 billion to Lehman’s brokerage around the time of the 2008 bankruptcy, sued Lehman back after the $8.6 billion suit, alleging Lehman defrauded its lender into making the loan. It has asked a judge to dismiss Lehman’s suit.

Lehman filed the biggest bankruptcy in U.S. history in 2008, listing $613 billion in debt.

© Copyright 2024 Bloomberg News. All rights reserved.

Friday, 17 February 2012 03:25 PM
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