December 31, 2012
Canadian Imperial Bank of Commerce (NYSE: CM ) today announced the settlement of an outstanding dispute with the Lehman Estate, representatives of the former Lehman Brothers Holdings. According to the release, CIBC has agreed to pay the Lehman Estate a total of $149.5 million to conclude the proceeding, initiated by the Lehman Estate in September 2010.
According to allegations brought by the Lehman Estate, CIBC, among other financial institutions, was obligated to fund a variable funding note as part of a collateral debt obligation. CIBC had recognized a gain of $841 million from the CDO following Lehman Brothers' Sept. 15, 2008, bankruptcy filing.
The proceedings claimed Canadian Imperial Bank of Commerce's actions were improper, and it was obligated to fund the CDO. Today's agreement settles the dispute between CIBC and the Lehman Estate, according to the bank. The payment amounts to $110.3 million after tax, according to CIBC.