Lehman Creditors Drop Legal Action Against Geithner
Lehman Brothers Holdings Inc.'s creditors dropped a legal action against U.S. Treasury Secretary Timothy Geithner after he agreed to answer questions in writing about the defunct investment bank's failure, Bloomberg News reported yesterday. Lehman's creditors' committee asked a judge in February to force Geithner to give a deposition in Lehman's lawsuit against JPMorgan Chase & Co., which alleged that the bank siphoned $8.6 billion out of Lehman during the 2008 credit crisis, helping to cause its collapse. A U.S. district judge closed the case yesterday after creditors agreed to end their action, according to a federal court filing. Geithner was president of the Federal Reserve Bank of New York when Lehman collapsed. He held discussions in the week before the bankruptcy filing with Richard Fuld and James Dimon, Lehman's and JPMorgan's chief executive officers, on the collateral that JPMorgan was demanding for its loans, according to creditors' court filings. He also met with Dimon and Henry Paulson, then treasury secretary, to discuss "concerns" that Dimon was using the crisis to strengthen JPMorgan at Lehman’s expense, creditors said.