obtained as the security services company's lender to help Western Resources Inc. in its $3.5 billion hostile bid for ADT.

The Bermuda-registered company claims Chase agreed in 1993 not to finance a takeover attempt for ADT when the bank helped arrange a loan for ADT, according to a lawsuit the security company filed last week. The bank broke that agreement when it agreed to finance Western's bid the day it was announced, December 18, the suit claims.

The suit said that confidential information ADT gave to Chase was "used in connection with the takeover effort and shared with persons who are advising Western on its takeover strategy.'' ADT urged the court to bar Chase from assisting Western Resources. The suit, which was filed in New York state Supreme Court in Manhattan, seeks $50 million in punitive damages and other, unspecified damages.

The suit shows the pitfalls Chase faces as it strives to offer companies investment banking advice on mergers and to put up the money needed to fund takeovers. At the same time the bank is the largest corporate lender in the US, giving it confidential information about companies that might someday become takeover targets.

A Chase spokesman declined to comment on the lawsuit.

ADT said it sought its 1993 loan from Chase after the bank agreed not to finance a hostile takeover of ADT. ADT was worried about a takeover at the time because Laidlaw Inc., which owned 24 percent of the company's stock, was trying to place representatives on its board.

Chase agreed, and soon expanded its relationship with ADT to become the company's financial adviser as well, the suit claims. As adviser, Chase met with ADT's executives and was privy to confidential information about the company's strategy and operations.

After learning that Chase planned to finance the roughly $900 million cash portion of Western's bid, ADT's chief executive called his banker at Chase, Robert Kellas, who put him in touch with Arjun Mathrani, a senior managing director.

Mr. Mathrani, according to the suit, said Chase did not have to abide by its agreement not to work with a hostile bidder because ADT earlier had tried to merge with Republic Industries Inc.

"Mr. Mathrani said that, by such conduct, ADT had put the company `into play,''' ADT said.

ADT has made it clear that it does not want Western as a partner, charging the power company has little experience running a security company and that its plan to replace top executives will hobble ADT.

In its suit, ADT said a Western takeover "would cause serious and irreparable harm'' to its business. "Chase's commitment to participate in financing and advise Western in connection with the hostile takeover is the linchpin to the takeover's success,'' the company said in its suit.