BMO Plans To Appeal Verdict In Petters Litigation

(RTTNews) - BMO Financial Group (BMO, BMO.TO) said 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 US$564 million against BMO Harris in favour of the Trustee in bankruptcy proceedings for certain Petters entities. The lawsuit alleged that between 1999 and 2008, before it was acquired by BMO Harris in 2011, M&I (and a predecessor bank) facilitated the Ponzi scheme operated by Petters.

As per 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 noted that it will record a provision, which includes estimated possible pre-judgment interest net of estimated recoveries, in the amount of C$1.12 billion, resulting in an after-tax charge of C$830 million to be recorded in the fourth quarter in the Corporate Services segment and treated as an adjusting item.