U.K. Judge Tells Merrill, UBS to Seek Lombardy Swaps Settlement
January 20, 2012, 6:26 PM ESTBy Kit Chellel
Jan. 20 (Bloomberg) -- Bank of America Corp.’s Merrill Lynch unit and UBS AG must try to reach an out-of-court resolution to their dispute with the Italian Region of Lombardy over interest-rate transactions, a London judge ruled.
Judge Nigel Teare granted an order for alternative dispute resolution at a hearing today.
Merrill and UBS sued Lombardy in the U.K. in 2010 to uphold derivatives contracts sold to the region. Lombardy, the northern Italian region where Milan is located, accused the banks of fraud and hidden fees, according to court papers.
Italian local governments including Tuscany, Lazio, Piedmont and Florence have challenged investment banks in the courts over derivatives contracts which turned out to cost more than expected.
UBS lawyer Sonia Tolaney said at today’s hearing the Zurich-based bank had restarted informal negotiations with Lombardy in December. Richard Handyside, an attorney for New York-based Merrill, said the bank wasn’t currently in talks with the region.
The Merrill case is: Merrill Lynch International Bank Ltd. v. The Region of Lombardy, 10-828, High Court of Justice, Queen’s Bench Division, Commercial Court.
--Editors: Christopher Scinta, Peter Chapman
To contact the reporter on this story: Kit Chellel in London at cchellel@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
