- Canadian Imperial Bank of Commerce ( NYSE: CM ), known as CIBC, has agreed to pay US$770M to a special purpose vehicle controlled by Cerberus Capital Management to settle a lawsuit that Cerberus filed against the bank.
- Both parties have also agreed to mutual releases. The lawsuit, filed by Cerberus in November 2015, relates to an October 2008 transaction in which CIBC ( CM ) issued a limited recourse note to Cerberus specifying certain payment streams and another transaction in 2011 in which CIBC sold a residual interest in the payment streams to Cerberus.
- As a result of the settlement, CIBC ( CM ) recorded a pretax provision of C$1.17B in Q1 2023 results to be released on Feb. 24, 2023, representing damages and prejudgment interest totaling US$885M through Jan. 31, 2023. The US$85M difference between the amount recorded in Q1 2023 and the settlement amount will be reflected in CIBC's Q2 results.
- In January, CIBC ( CM ) said it planned to appeal a New York court decision that found the bank liable for US$491M in damages, plus prejudgment interest.
For further details see:
CIBC to pay $770M to Cerberus SPV to settle lawsuit over 2008 transaction