Yes, Lehman Brothers Still Exists -- And JPMorgan Will Mail It Nearly $800 Million

JPMorgan Chase (JPM) - Get Report  agreed to pay $797.5 million to Lehman Brothers to settle lawsuits or disputes dating to the 2008 financial crisis. 

New York-based JPMorgan said in a regulatory filing Wednesday that the cash will address claims not covered under the $1.42 billion settlement it already agreed to last year. 

Investment bank Lehman Brothers filed the biggest bankruptcy in U.S. history in September 2008, saying that JPMorgan Chase, which served as Lehman's custodian and clearing bank, improperly drained Lehman's liquidity in the days before the firm collapsed.

Lehman initially filed an $8.6 billion lawsuit, seeking money to repay creditors. JPMorgan has only paid a portion of those damages, while neither party has admitted to any wrongdoing. 

Cathy Seifert, an analyst with CFRA Research, maintains her buy rating on JPMorgan with a price target of $98, saying that the firm has previously reserved money for the case.

"Lehman's claims that JPMorgan acted improperly and with bad faith in its role as custodian and clearing entity were rejected by a judge overseeing this case," Seifert wrote in a note. 

The earlier ruling found that JPMorgan didn't abuse its leverage as Lehman's primary clearing bank, Seifert added. 

With over $600 billion in assets, Lehman was one of the largest banks in the U.S., but the financial crisis brought on by the weakening of the U.S. housing market with subprime mortgages led to its demise. 

After Lehman emerged from bankruptcy in 2012, a bankruptcy court agreed to liquidate its assets, which will take years to sell.  

"I view this as a positive resolution," Seifert said in a phone interview. "While they're [JPMorgan] paying because there was some financial dispute, there wasn't harm." 

The settlement is contingent upon approval by the U.S. Bankruptcy Court later this month.

Shares of JPMorgan dropped 0.4% to $84.61 on Thursday, adding to its year-to-date decline of nearly 2%.