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Credit Suisse announces resolution of Lehman Brothers claims

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Credit Suisse AG and certain of its subsidiaries (“Credit Suisse”) announced that it has  reached an agreement with Lehman Brothers Holdings Inc. and certain of its subsidiaries (“Lehman”) to resolve legacy claims from Lehman’s 2009 bankruptcy. The claims relate to terminated derivatives transactions between the two parties.

According to a Credit Suisse statement, “Under the agreement, Credit Suisse’s claims will be allowed in the Lehman bankruptcy in the total amount of USD385 million.  Based on the terms of the agreement, Credit Suisse expects a non-material PnL impact of approximately USD 70 million within its Strategic Resolution Unit (SRU). As previously disclosed, this amount is consistent with its existing SRU guidance for 2018 and as such will not have a material impact to the bank. We remain on track with the wind down of our SRU division by end of 2018.”

According to earlier court filings, Credit Suisse had sought $1.2 billion from Lehman for terminated derivatives transactions; an amount that Lehman had accused Credit Suisse of inflating by as much as $1 billion. The impact of the transaction on Credit Suisse will complicated by its sale of much of its outstanding claim to hedge funds in a series of claim participation agreements.

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