Byd John Letzing
UBS AG on Friday won a lawsuit brought by Decura IM Investments
LLP which alleged that cut backs at the Swiss lender's investment
bank meant it had violated the terms of a joint venture.
The Wall Street Journal reported earlier this month that the
London court case had put UBS executives in the awkward position of
arguing that the investment bank's restructuring was not as
extensive as some believed.
Decura had argued that the restructuring at the Swiss lender,
which began in 2012, meant UBS could no longer distribute Decura's
products to its clients. The investment firm said the restructuring
should have triggered a termination event in the contract it held
with UBS, and it was seeking $167 million in compensation.
But a British judge said Decura failed to prove that it had
suffered from an extensive restructuring at UBS that closed a
"material" part of its investment banking business--including its
debt-trading, or "fixed income" business.
"It is plain that UBS didn't close down their Fixed Income
division," the judge said, adding that the division did "$1 billion
worth of business" during the first half of last year.
Decura Chief of Staff Robb Corrigan declined to comment.
A UBS spokeswoman said the bank welcomed the decision.
"The findings confirm that the strategic repositioning of the
bank did not have an adverse effect on UBS' ability to market
Decura's products. Following the judgment, UBS and Decura have
agreed to resolve their differences and have terminated their
relationship," the spokeswoman said in a statement.
In Oct. 2012, UBS announced "Project Accelerate," a
restructuring plan that it described as an effort to scale back
both the size and scope of its investment bank. The move was
designed to help UBS withstand tougher regulations, and has
generally been applauded by investors and analysts.
Write to John Letzing at john.letzing@wsj.com
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