A group of companies is suing the government over a $1.4 billion settlement in the bankruptcy of the troubled company that was acquired by JPMorgan Chase & Bank of America, according to a court filing in California.
The lawsuit says the settlement is unfair because it allowed the banks to avoid paying creditors and allowed companies to take more risks.
The settlement, which JPMorgan Chase announced Monday, includes a $2.9 billion loan to Bank of American to cover the $2 billion debt.
JPMorgan Chase has not said how much the settlement will be.
The companies’ lawsuit seeks a declaration that the government violated the U.S. Constitution’s Commerce Clause by failing to compensate the companies and to pay them for losses caused by the bankruptcy.
The government has said it will not appeal the decision.
Bank of Americans and other lenders have said they will not pay for any loss on the $1 billion they received from the bank, which filed for Chapter 11 bankruptcy protection in July.
The bankruptcy case, which is separate from the bankruptcy cases of the banks, also involved the company’s subsidiaries.
Bank Of America, which was the largest U.A.E. lender, filed for bankruptcy protection on Jan. 17.
The other banks, Citigroup, JPMorgan Chase, and Wells Fargo, are still being probed over whether they should be included in the settlement.
JPMorgan is suing to block the settlement, and the Justice Department has asked for a judge to throw out the claim against the banks.
The bank and the other banks say they agreed to the $7.9 million settlement as part of the government’s bankruptcy efforts, which it said would help the banks “make better business decisions and support their communities.”
The settlement also includes an $800 million payment to the U