James Giddens, the court-appointed trustee for the bankrupt brokerage, called the settlement "a milestone" in his efforts to recover money for the customers.
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A settlement would secure the return of $755 million of cash and about $106 million of securities, according to a motion filed Thursday the U.S. bankruptcy court in Manhattan.
"The proposed settlement would substantially increase the fund of customer property for distribution," the motion said, "without the uncertainty and delay of litigating disputed claims."
JPMorgan, the second-largest U.S. bank, in a statement said the main source of the returned assets will be from funds that the bank had set aside pending a resolution with the trustee.
The settlement will have no material financial impact on JPMorgan, the New York-based bank said.
A settlement requires approval of U.S. Bankruptcy Judge Burton Lifland, who oversees Lehman bankruptcy proceedings.
Once the fourth-largest U.S. investment bank, Lehman filed for Chapter 11 protection on September 15, 2008, in what remains by far the largest bankruptcy in U.S. history.
The case is In re: Lehman Brothers Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-01420.
(Reporting by Jonathan Stempel in New York, editing by Matthew Lewis)