The new CIBC logo displayed the the lobby of its headquarters in Toronto on Oct. 25, 2021.Evan Buhler/The Canadian Press
Canadian Imperial Bank of Commerce could be forced to pay more than US$1-billion in damages after being found liable for losses incurred by a New York hedge fund over two debt deals dating back to the 2008 U.S. housing crisis.
CIBC said Friday it intends to appeal the decision handed down by a New York State Court late Thursday, which found the bank liable for damages in a case filed by Cerberus Capital Management L.P. in November, 2015.
While the court has not determined the exact amount the bank will have to pay, Cerberus has claimed damages of nearly US$1.1-billion, though CIBC said it will “vigorously dispute” that figure at a Dec. 19 hearing. CIBC said it expects to record a charge against its earnings for the first quarter of 2023, which began Nov. 1. The amount of the estimated loss “will be informed by developments in the quarter.”
The ruling marks the second time in as many months that a major Canadian bank has faced a billion-dollar charge against earnings after losing a years-long legal battle.
A jury in a Minnesota bankruptcy court found the U.S. arm of Bank of Montreal was liable in early November for US$564-million in damages related to a nearly $2-billion Ponzi scheme, one of largest-ever frauds of that kind. BMO also said it planned to appeal the decision, though also took a $1.1-billion charge at the time.
Cerberus, a New York…
