New York court issues liability ruling against CIBC in Cerberus lawsuit

Fri, December 2, 2022


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.

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The Canadian Press