CIBC agrees to settle Cerberus lawsuit for US$770 million

CIBC says it has entered into an settlement to settle a lawsuit filed in opposition to it by non-public fairness agency Cerberus Capital Management LP.

The firm says it is agreed to pay US$770 million to Cerberus to totally settle the lawsuit, together with the latest judgment of a New York court docket.

Earlier in January, a New York court docket resolution discovered the Canadian financial institution accountable for damages within the lawsuit, and on the time CIBC mentioned it disagreed with the premise for the court docket’s resolution and deliberate to attraction.

The lawsuit was filed in November 2015 and anxious an October 2008 transaction the place CIBC issued a restricted recourse word to Cerberus specifying sure cost streams, and a 2011 transaction the place CIBC offered a residual curiosity within the streams to the agency.

CIBC says it recorded a pre-tax provision of CAD$1.17 billion associated to the settlement in its first-quarter 2023 outcomes, which might be launched on Feb. 24.

The financial institution says there is a distinction of US$85 million between the availability and the settlement quantity, which might be mirrored in its second-quarter outcomes.

This report by The Canadian Press was first revealed Feb. 17, 2023.