tiprankstipranks
BMO Harris to appeal verdict in Petters litigation
The Fly

BMO Harris to appeal verdict in Petters litigation

BMO Financial Group announced that its subsidiary, BMO Harris Bank N.A. intends to pursue all available legal options including appealing the jury verdict and award in a lawsuit related to a Ponzi scheme carried out by Thomas J. Petters and certain affiliated individuals and entities that operated a deposit account at a predecessor bank, M&I Marshall and Ilsley Bank. The jury awarded damages of approximately $564M against BMO Harris in favour of the Trustee in bankruptcy proceedings for certain Petters entities. As previously disclosed, the lawsuit alleges that between 1999 and 2008, before it was acquired by BMO Harris in 2011, M&I facilitated the Ponzi scheme operated by Petters. Pursuant to a prior settlement in connection with another Petters matter, BMO Harris is entitled to recover approximately 21% of any amount that it pays to the Trustee. BMO Harris strongly denies the plaintiff’s allegations and will continue to defend itself vigorously, including by bringing an appeal to the United States Court of Appeals for the Eighth Circuit, to contest the jury verdict and award. "We are disappointed with the jury’s verdict, which is not supported by the evidence or the law. We will file a number of post-trial motions with the trial judge to reverse the verdict or reduce the damages, and we intend to pursue all avenues to overturn the jury’s verdict, including appeals. We are confident that we have strong grounds for appeal," stated a BMO Harris spokesperson. As a result of this outcome, in accordance with applicable accounting standards, BMO will record a provision, which includes estimated possible pre-judgment interest net of estimated recoveries, in the amount of C$1.12B, resulting in an after-tax charge of C$830M to be recorded in the fourth quarter in the Corporate Services segment and treated as an adjusting item.

Published first on TheFly

See the top stocks recommended by analysts >>

Read More on BMO:

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles