(August 19, 2013) — The Operating Engineers Pension Trust of Pasadena, California, has won a settlement from JP Morgan, with the bank agreeing to post $23 million for claimants over investing in Lehman Brothers notes.
In agreeing to settle JP Morgan denied wrongdoing, and entered the settlement solely to eliminate the burden and cost of litigation, according to a report on FirstPost. The settlement still requires approval by US District Judge Katherine Forrest in Manhattan.
The case over the Lehman Brothers notes was led by the Pasadena-based pension fund: The plaintiffs said JP Morgan wrongly put their money in Lehman notes despite being “uniquely positioned” as the now defunct investment house’s main clearing bank, to know that Lehman Brothers’ survival was in question, and while reducing its own exposure.
The Operating Engineers Pensions Trust said JP Morgan bought $446,000 of Lehman notes in 2006 on its behalf with collateral it had posted, and refused to sell as Lehman Brothers’ troubles mounted.
It said these notes lost 85% of their value when Lehman Brothers went bankrupt on September 15, 2008.
JP Morgan fared better with the second settlement decision revealed at the end of last week: liquidators for two Bear Stearns hedge funds that collapsed in 2007 because of problems with subprime mortgages agreed to drop their lawsuit against JP Morgan to recoup at least $1.1 billion of losses. JP Morgan bought Bear in 2008.
In other news, fresh fruit and vegetable producer Dole Food Chief Executive David Murdock has been sued by an Oklahoma police pension fund over his buyout that valued the company at $1.21 billion, according to a report on Bloomberg.
The Oklahoma Police Pension and Retirement System argued that Murdock’s offer for $13.50 a share in cash for the 60% of Dole that he or his family doesn’t already own short-changed shareholders, according to a complaint filed today in Delaware Chancery Court.
The pension fund, which owns about 90,000 shares, also sued other Dole executives claiming they weren’t really independent in their assessment of the deal.
“Murdock began a low-ball bid — a price less than the average he paid in open-market purchase late last year — and then agreed to a higher price in ‘negotiations’ with a special committee of the board purportedly composed of ‘independent and
“If the transaction is approved, the public holders will be frozen out in a grossly unfair transaction,” they said, asking for the deal to be blocked.
Related Content: Institutional-Grade Lawsuits: Fewer Dismissals, Larger Settlements and Lehman, Nortel, and a More Certain Future for Bankrupt Company Pensions