Aladdin wins dismissal of German bank CDO lawsuit

* Aladdin allegedly reckless, negligent in handling CDO

* Credit problems said to wipe out German bank investment

NEW YORK, July 11 (Reuters) - Aladdin Capital Management LLC has won the dismissal of a lawsuit by Germany's Bayerische Landesbank (BLGGgi.BE) to recover at least $60 million of alleged losses related to a collateralized debt obligation.

U.S. District Judge Denise Cote in Manhattan granted the dismissal on Friday, court records show. It was not immediately clear on what basis she dismissed the case.

A lawyer for BayernLB did not immediately return a call seeking comment.

In its complaint filed in January, BayernLB accused Aladdin of being "reckless and grossly negligent" in performing its duties as portfolio manager for the CDO. [ID:nN31250268]

The bank said Aladdin marketed the CDO as "investment-grade," but the investment was wiped out after at least 11 underlying entities, including Lehman Brothers Holdings Inc LEHMQ.PK, Washington Mutual Inc WAMUQ.PK and two Icelandic banks suffered "credit events."

BayernLB is one of a series of banks from Germany's rigid public sector landesbank system that sued various institutions over CDOs that went sour.

Aladdin is based in Stamford, Connecticut.

The case is Bayerische Landesbank, New York Branch v. Aladdin Capital Management LLC, U.S. District Court, Southern District of New York, No. 11-00673. (Reporting by Jonathan Stempel; editing by Andre Grenon)