Lehman creditors look to investigate potential role of JPMorgan in bankruptcy filing

By Jennifer Lanning Drey

Portland, Ore., Oct. 3 - Lehman Brothers Holdings Inc.'s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the Southern District of New York to allow it to investigate the potential role of JPMorgan Chase Bank, NA in Lehman's bankruptcy filing, according to a Thursday court filing.

The committee said Lehman had at least $17 billion in excess cash and securities held at JPMorgan, which JPMorgan refused to make available to Lehman in the days leading up to its bankruptcy filing.

The creditors believe that by not making the assets available to Lehman and its subsidiaries, JPMorgan may have contributed to Lehman's liquidity constraints.

The committee also said that on the eve of its bankruptcy filing, Lehman guaranteed obligations of its subsidiaries and then transferred the property to JPMorgan to secure the obligations.

The creditors said they want to understand the intent, effect, consideration and financial conditions of Lehman at the time of the transfer.

A hearing has been scheduled for Oct. 16.

New York-based Lehman Brothers Holdings is the fourth largest investment bank in the United States. The company filed for bankruptcy on Sept. 15. Its Chapter 11 case number is 08-13555.

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