Geithner Agrees to Written Testimony in Lehman’s JPMorgan Suit

Wednesday, 21 Mar 2012 12:13 PM

 

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U.S. Treasury Secretary Timothy Geithner agreed to answer questions in writing in Lehman Brothers Holdings Inc.’s lawsuit alleging that JPMorgan Chase & Co. contributed to Lehman’s collapse in 2008.

Geithner’s agreement, noted in a March 16 filing by the U.S. in federal court in Washington, forestalls a judge’s ruling on whether he could be compelled to testify in the case. U.S. District Judge Reggie Walton yesterday accepted the arrangement and ordered both sides to update him by April 3.

“If the parties should reach an impasse or plaintiff is otherwise dissatisfied with the written responses, the parties shall so notify the court,” Assistant U.S. Attorney John Interrante said in the filing.

Lehman sued Geithner in February, alleging that the Treasury Department “has for many months delayed and ultimately refused” to allow testimony by the secretary. His testimony is key to Lehman’s contention that JPMorgan siphoned off $8.6 billion during the 2008 credit crisis, according to a court filing in Washington.

Geithner, at the time president of the Federal Reserve Bank of New York, discussed the collateral JPMorgan was demanding for its loans with Richard Fuld and Jamie Dimon, Lehman’s and JPMorgan’s chief executive officers, in the week before Lehman’s bankruptcy, according to the filing. He also met with Dimon and Henry Paulson, then Treasury Secretary, to discuss “concerns” that Dimon was using the crisis to strengthen his bank at Lehman’s expense, they said.

Paulson’s Answers

Paulson, according to the March 16 filing, has also agreed to answer questions in writing.

Lehman claims in court papers to have interviewed more than 200 witnesses.

The biggest U.S. bank, which lent $70 billion to Lehman’s brokerage around the time of the 2008 bankruptcy, sued Lehman back after the $8.6 billion suit, alleging Lehman defrauded its lender into making the loan. It has asked a judge to dismiss Lehman’s suit.

Lehman filed the biggest bankruptcy in U.S. history in 2008, listing $613 billion in debt.


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