Lehman Estate Sues JPMorgan for Billions
Suit: Firm 'held gun' to Lehman in massive ripoff
By Rob Quinn,  Newser Staff
Posted May 27, 2010 1:23 AM CDT
Lehman Brothers world headquarters is shown in New York on September 15, 2008, the day it filed for bankruptcy.   (AP Photo/Mark Lennihan, file)

(Newser) – Lehman Brothers' bankruptcy estate has launched a huge lawsuit against JPMorgan Chase, accusing the bank of abusing its position to siphon off billions of dollars in Lehman's dying days. The suit alleges that JPMorgan used its inside knowledge of Lehman's troubles to hold a "financial gun" to its head, forcing it to post huge amounts of collateral to continue trading and sending it spiraling into bankruptcy, the Wall Street Journal reports.

"The effect of JPMorgan’s actions—taken with the benefit of unparalleled inside knowledge—was devastating," say Lehman's lawyers, who are seeking the return of $8.6 billion on collateral plus billions more to compensate for the fallen financial giant's lost value. A JPMorgan spokesman labeled the Lehman suit "ill-conceived," and said Lehman had nobody but itself and its investment in subprime mortgages to blame for its downfall.