New York, NY ( March 27, 2012) - Paul Hastings LLP, a leading global law firm, announced today that the firm obtained the unanimous dismissal by New York's First Department of all fraud claims and affirmation of the dismissal of negligent misrepresentation and punitive damages claims brought by HSH Nordbank, a German commercial bank, against UBS.
The case involves HSH's $500 million purchase of notes in a synthetic CDO transaction called North Street 2002-4. HSH had argued that it was fraudulently induced to enter into the transaction by UBS's alleged misrepresentations concerning the risks involved and how UBS intended to administer the transaction.
In a well-reasoned opinion with far-reaching implications for sophisticated parties engaging in complex commercial transactions, the First Department agreed with UBS that HSH, a sophisticated bank, could not have justifiably relied on any alleged "advice" from UBS and that HSH could have uncovered any alleged misrepresentation concerning the transaction through the exercise of reasonable due diligence. The Court further agreed that the fraud claim should also be dismissed because it was impermissibly duplicative of a breach of contract claim. Finally, the Court ruled that the negligent misrepresentation claim was properly dismissed because the parties expressly agreed that they were dealing with each other at arm's length, and affirmed the dismissal of any claim for punitive damages.
Read the Courts decision via the "View News Item" button below.
Chair of the Securities Litigation practice Barry Sher
argued the appeal and led the Paul Hastings team representing UBS, which included James Bliss
, Kevin Broughel
, James Worthington
and Maria Douvas
Paul Hastings LLP is a leading global law firm with offices in Asia, Europe, and the United States. We provide innovative legal solutions to financial institutions and Fortune 500 companies.