Canadian Imperial Bank of Commerce said there's "no merit" to a lawsuit filed by a unit of Cerberus Capital Management LP accusing the bank of defaulting on payments tied to U.S. real estate.
CIBC will "vigorously defend itself" against the legal action, which seeks additional payments of at least hundreds of millions of dollars, according to a statement Monday from the Toronto-based lender. The lawsuit, filed in federal court in Manhattan on Oct. 30, relates to an October 2008 transaction in which CIBC issued a limited recourse note to Cerberus, which significantly reduced the bank's exposure to the U.S. residential real estate market, the lender said.
CIBC subsequently sold a residual interest in the payment streams to Cerberus, the bank said. The lender said it satisfied its obligations, including making 85 monthly payments totaling more than $1.24 billion, which Cerberus "accepted without question," according to CIBC. The Canadian bank said Cerberus "manufactured an entirely new interpretation of the deal" and claims the Canadian lender defaulted and owes unspecified additional payments.
A telephone message left with Peter Duda, a spokesman for Cerberus at Weber Shandwick, wasn't immediately returned.
The case is Securitized Asset Funding 2011-2 Ltd. V. Canadian Imperial Bank of Commerce, 15-08568, U.S. District Court, Southern District of New York (Manhattan).
