JPMorgan Sues FDIC For More Than $1 Billion

JPMorgan Sues FDIC For More Than $1 Billion

JPMorgan Chase & Co sued the Federal Deposit Insurance Corporation in federal court on Tuesday, saying the agency owes it more than $1 billion in compensation for not assuming legal claims arising from its acquisition of Washington Mutual's assets after its 2008 implosion.
JPMorgan bought Washington Mutual's banking operations in an FDIC-arranged deal at the height of the financial crisis, a little more than a week after Merrill Lynch agreed to sell itself to Bank of America Corp and Lehman Brothers filed for bankruptcy.
Under the terms of the deal, an FDIC receivership "broadly agreed to indemnify JPMC both for liabilities JPMC did not assume and for numerous other matters," the bank claimed in the 24-page lawsuit, filed in U.S. District Court for the District of Columbia.
"They are promises that the FDIC made to JPMC to induce JPMC to enter into the...agreement when WMB failed in September 2008, in the largest bank failure in this nation's history," the lawsuit states.
The bank accused the FDIC of breach of contract and breach of the covenant of good faith and fair dealing, while seeking declaratory judgments that the agency is obligated to compensate the bank.