JPMorgan Chase will pay $1.42bn in cash to resolve most of a lawsuit accusing it of draining Lehman Brothers of critical liquidity in the final days before that investment bank’s September 2008 collapse.

Reuters reports that the settlement was made public on Monday, and requires approval by U.S. Bankruptcy Judge Shelley Chapman in Manhattan.

It resolves the bulk of an $8.6bn lawsuit accusing JPMorgan of exploiting its leverage as Lehman’s main “clearing” bank to siphon billions of dollars of collateral just before Lehman went bankrupt on September 15, 2008, triggering a global financial crisis.

Lehman’s creditors charged that JPMorgan did not need the collateral and extracted a windfall at their expense.

Monday’s settlement also resolves Lehman’s challenges to JPMorgan’s decision to close out thousands of derivatives trades following the bankruptcy, court papers showed.

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JPMorgan to pay $1.42 billion cash to settle most Lehman claims

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