Bank of America Got Away With This One

| + More Articles
  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

A federal judge ruled in favor of a Bank of America (NYSE:BAC) unit in a breach of contract lawsuit against the Brazilian sugar and ethanol company Usinas Itamarati SA.

On Tuesday, the judge awarded $146.1 million to the Merrill Lynch Capital Services unit. The charges stemmed from losses that occurred during the economic downturn in 2008. In November 2007, UISA entered into a a swap that bet on the strengthening U.S. Dollar to the Brazilian Real.

Losses began to mount in September 2008 as the economic crises sped up and Merrill Lynch’s unit was forced to terminate the swap in October after the company failed to provide enough collateral.

The unit sued in March 2009. In his decision, the judge rejected defense arguments that the guarantee was unenforceable and said “defendants will be required to live up to the obligations they knowingly accepted.”

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business