Highland Capital Management LP’s 2011 lawsuit claiming a UBS AG (UBS:US)’s securities unit punished it by interfering with its loan in Lyondell Chemical Co.’s bankruptcy is dismissed, a judge ruled.
U.S. Bankruptcy Judge Robert Gerber granted UBS’s motion to dismiss the complaint in Manhattan bankruptcy court today, and Highland will get nothing, according to a court order. Highland had alleged that UBS failed to allocate a $150 million loan Highland pledged to fund Lyondell’s exit from bankruptcy, claiming “tortious interference” with its contract.
“There was no contract with Highland as a party with which UBS tortiously interfered,” Gerber said in his ruling.
Highland, a Dallas-based debt manager, said in its complaint that Lyondell accepted its $150 million loan offer before UBS Securities LLC interfered to punish Highland over an unrelated dispute. The UBS unit was an agent to lenders who took part in a loan to fund Lyondell’s Chapter 11 exit.
“UBS, to further its own personal unrelated dispute with Highland, refused to allocate any of the term loan to Highland, and caused Lyondell to breach its contract,” according to the complaint. “Such raw abuses of power disrupt the commercial workings of the market and should be stopped and punished.”
LyondellBasell Industries NV (LYB:US), based in Rotterdam, and its U.S. unit, Lyondell Chemical Co., left Chapter 11 protection in April 2010. Zurich-based UBS is a Swiss bank.
The case is Highland Capital v UBS, 11.1728, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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