JPMorgan Sues Perot’s Parkcentral for $753 Million Over Default

JPMorgan Sues Perot’s Parkcentral for $753 Million Over Default


Nov. 29 (Bloomberg) -- JPMorgan Chase & Co. alleged in a lawsuit that Parkcentral Capital Management LP, an investment firm that manages money for the family of ex-U.S. presidential candidate H. Ross Perot, owes as much as $753 million in collateral on investments.

JPMorgan said it entered into an agreement with Parkcentral in March 2002 obligating the fund to give it “certain marketable securities” for derivative contracts. Parkcentral said earlier this week that it will liquidate a fixed-income hedge fund because it’s “no longer viable” and sell its remaining holdings to pay creditors.

Perot, 78, the founder of Electronic Data Systems Corp. who ran unsuccessfully for president in 1992, and members of his family are the fund’s biggest investors.

New York-based JPMorgan said Parkcentral defaulted Nov. 20 on a demand for the transfer of $125 million in eligible credit support, resulting in the early termination of all outstanding transactions.

“By failing to perform its obligations under the master agreement, including its obligation to pay to JPMorgan the amount owing under the master agreement, Parkcentral has materially breached” it, JPMorgan said in a complaint filed Nov. 26 in New York state court in Manhattan.

Under the terms of the agreement, JPMorgan said it was entitled to demand that Parkcentral post collateral support, according to the complaint. Parkcentral has failed and refused to provide the credit, the bank alleged in the suit.

Hand-Delivered

JPMorgan said it has hand-delivered at least three notices of default to Parkcentral. The bank said it has suffered damages in the amount of $753 million, the amount due and owing under the master agreement for the early termination.

Eddie Reeves, a spokesman for Plano, Texas-based Parkcentral, couldn’t be immediately reached for comment. JPMorgan spokesman Joseph Evangelisti declined to comment.

Parkcentral Global Hub Ltd.’s assets fell as much as 40 percent to $1.5 billion this year through October.

The case is JPMorganChase Bank N.A., v. Parkcentral Global Hub Limited, 603473/2008, New York State Supreme Court (Manhattan).

BLOOMBERG