Excerpts: Tribune Lenders Sue JPMorgan Claiming Buyout Was Fraud
- When they pushed to close the two-stage transaction, the banks knew the $3.7 billion in financing “was tainted with fraud and other misconduct,” the lenders, who include hedge funds and investors who specialize in distressed debt, said in a complaint filed today in New York state court in Manhattan.
- In the complaint, a group that holds about $767.7 million of the $8.3 billion buyout debt alleged JPMorgan and the other banks violated the lending agreement that binds all of the lenders and the banks.
- The banks knew that the second stage of the transaction would add so much debt on the company that Tribune wouldn’t be able to repay the loans, according to the complaint.
- The case is Alden Global Distressed Opportunities Fund LP v. JPMorgan Chase Bank NA, 651884/2010, New York State Supreme Court (Manhattan).