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July 24, 2008 10:47:57 PM CDT

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Sallie Mae Drops $900M Lawsuit

Posted Jan 29, 08 9:31 AM CST in Business 

(Newser) – Beleaguered student loan provider Sallie Mae yesterday dropped its $900 million lawsuit against the onetime suitors who bailed on a $25.3 billion buyout after the credit crunch caused would-be investors to walk away, reports the Washington Post. By agreeing not to seek the penalty from investment firm JC Flowers and several partners, Sallie Mae secured $31 billion in financing.

In April, Flowers, Bank of America and JP Morgan negotiated to buy Sallie Mae for $60 a share, a premium of nearly 50%. The summer’s subprime crisis prompted the buyers to renege, sending Sallie Mae’s shares into freefall and setting off a bitter personal battle between Sallie Mae CEO Albert Lord and billionaire investor Christopher Flowers.

Source Washington Post

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Student loan giant Sallie Mae has dropped its $900 million lawsuit against a New York investment firm.   (Getty Images)
Student loan giant Sallie Mae has dropped its $900 million lawsuit against a New York investment firm.   (Associated Press)
Student loan giant Sallie Mae has dropped its $900 million lawsuit against a New York investment firm.   (Getty Images)
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lawsuit  • credit crisis  • private equity  • JPMorgan Chase  • Bank of America  • student loans  • Sallie Mae  • JC Flowers and Co  • SLM Corp


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