Wednesday, 25 May 2016
Last updated 3 hours ago
Aug 12 2010 | 12:01pm ET
Last month, Highland Capital Management sued UBS and one of its investment banking clients, alleging that it was kept out of LyondellBasell Industries’ bankruptcy-exit financing because of another legal spat between the hedge fund and UBS. Now, the investment bank and Lyondell are seeking to have Highland’s lawsuit against them junked, as UBS’s lawsuit against Highland over a bad collateralized debt obligation deal was six months ago (UBS has since refiled the lawsuit).
According to Lyondell’s motion to dismiss the Highland lawsuit, Highland’s lawsuit came too late—its bankruptcy plan was signed off on in April, a month after the hedge fund learned that it was being excluded from the financing. Lyondell called Highland’s bid to halt its bankruptcy plan a “transparent attempt to end-run around” the plan.
“Not only did Highland fail to raise its accusations at any number of stages during the bankruptcy process, but Highland never even contacted that reorganized debtors to lodge a complaint about conduct it now alleges caused substantial damages,” Lyondell wrote. What’s more, some Highland funds actually voted in favor of the plan that excluded them the company alleges.
Finally, Lyondell told the New York federal bankruptcy court, Highland picked the wrong venue and should have filed its complaint in federal court rather than New York state court.
In its lawsuit, Highland said that “UBS brazenly admitted that it refused to provide any allocation to Highland because of the UBS/Highland litigation.”