A multibillion-dollar lawsuit alleging the Bank of Montreal destroyed evidence in a case involving a decade-old Ponzi scheme is scheduled to go to trial on Oct. 7, according to court documents filed Monday.
Meanwhile, in a move that is common at the pre-trial stage, a federal judge in Minnesota who is overseeing the case is urging both parties to reach a settlement. The trial has already been delayed months because of the COVID-19 pandemic.
The potential $1.9 billion legal exposure, plus interest, punitive damages and attorneys’ fees, could throw a wrench in BMO’s proposed takeover of Bank of the West, which was announced in December.
Bloomberg
It’s unclear if BMO or the bankruptcy trustees bringing the suit are open to a settlement.
“Given the matter is before the courts, it would not be appropriate to comment,” a BMO spokesperson said Monday in a statement.
One individual with knowledge of the case, who spoke on condition of anonymity, said that it makes sense that a settlement conference would occur, given how much money is on the line.
“All of the major pre-trial arguments have been resolved and the parties are now headed for a trial with billions of dollars at stake,” this person said.
Banks often try to clear up major legal troubles before merger deals are approved.
For instance, Cadence Bancorp in…
