Lehman estate to net $110.3 million in CIBC note funding settlement

By Caroline Salls

Pittsburgh, Dec. 31 - Lehman Brothers Holdings, Inc.'s estate will receive a net payment of $110.3 million under a settlement with CIBC, according to a CIBC news release.

CIBC will remit $149.5 million to the Lehman estate before taxes.

CIBC said it recognized an $841 million gain following Lehman's September 2008 bankruptcy filing. The gain resulted from the reduction to zero of CIBC's unfunded commitment on a variable funding note issued by a collateral debt obligation (CDO).

The company said this reduction followed actions of the indenture trustee for the CDO after the bankruptcy filing by Lehman, the guarantor of a related CDS agreement with the CDO.

In September 2010, the Lehman estate instituted a proceeding against numerous global financial institutions, indenture trustees and noteholders, including CIBC, related to this and more than 40 other CDOs, claiming that the indenture trustees' actions were improper and that CIBC was obligated to fund the note in question.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company emerged from bankruptcy on March 6, 2012.

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