New York court issues liability ruling against CIBC in Cerberus lawsuit

The Canadian Press
New York court issues liability ruling against CIBC in Cerberus lawsuit

TORONTO — CIBC says a New York court has issued a liability ruling against the Canadian bank in a lawsuit brought by Cerberus Capital Management LP.

Cerberus filed the lawsuit in November 2015.

The case related to an October 2008 transaction in which CIBC issued a limited recourse note to Cerberus specifying certain payment streams, and a subsequent transaction in 2011 in which CIBC sold a residual interest in the streams to the private equity firm.

Cerberus claimed damages of US$1.067 billion at trial earlier this year.

CIBC says it intends to appeal the liability ruling and will dispute Cerberus’s measure of damages at a hearing on Dec. 19.

The bank says it expects to recognize a provision in its first-quarter 2023 results, the estimate of which will be determined by developments during the quarter.

This report by The Canadian Press was first published Dec. 2, 2022.

Companies in this story: (TSX:CM)

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