BofA unit wins $146 million after currency swap trial
(Reuters) - A federal judge has awarded a Bank of America Corp unit $146.1 million in a breach-of-contract case against the Brazilian sugar and ethanol company Usinas Itamarati SA, over losses stemming from the 2008 global financial crisis.
U.S. District Judge Richard Sullivan said the bank's Merrill Lynch Capital Services Inc unit deserved the entire amount it sought because Itamarati had guaranteed obligations of its UISA Finance affiliate under a series of derivative transactions.
Sullivan presided last June in a five-day bench trial in Manhattan over the dispute, and issued his decision on Tuesday. UISA was also a defendant.
Rick Werder, a lawyer for the defendants, said on Friday: "Our clients respectfully disagree with the court's decision, and various earlier decisions in the case, and plan to appeal."
Bank of America spokesman Bill Halldin said the bank is pleased with the decision.
The case arose out of a November 2007 swap in which UISA accepted exposure to a strengthening U.S. dollar relative to the Brazilian real.
Sullivan said a successful bet could have saved UISA millions of dollars. But losses began to grow in September 2008 and Itamarati failed to provide Merrill with enough acceptable collateral, causing the swap to be terminated on October 28, 2008. Merrill sued in March 2009.
"Defendants have labored hard and long to extricate themselves from that bet," Sullivan wrote. "Those labors are unavailing and ... defendants will be required to live up to the obligations they knowingly accepted."
Sullivan rejected Itamarati's argument that its guarantee was unenforceable because the people who signed the paperwork lacked authority to do so.
He was particularly critical of one trial witness, Ana Claudia De Moraes Tamer, the sole shareholder of the privately-held company.
The judge said her "shifting and contradictory deposition testimony, trial affidavit, and trial testimony" made her "an utterly non-credible witness not worthy of belief."
Itamarati is based in Nova Olimpia, Brazil, while Bank of America is based in Charlotte, North Carolina.
The case is Merrill Lynch Capital Services Inc v. UISA Finance et al, U.S. District Court, Southern District of New York, No. 09-02324.
(Reporting By Jonathan Stempel in New York; Editing by Tim Dobbyn and Matthew Lewis)
- Atheists face death in 13 countries, global discrimination: study
- Missouri executes man for killing good Samaritan motorist in 1994
- Focus turns to Thai military, anti-government protesters tell them to pick sides
- Google executives' planes saved millions in costs due to error - NASA
- Apple scores legal victory over Samsung in South Korea