Bank of America’s Merrill Lynch units won a case on appeal to Japan’s highest court against a ruling that they must pay damages to failed consumer lender Takefuji Corp. for their role in a bond transaction.
Bloomberg News reports that the Supreme Court of Japan overturned the high court decision that Merrill Lynch International and Merrill Lynch Japan Securities must pay $128m in compensation to Takefuji. The Tokyo High Court made the ruling in August 2014, overturning a district court judgment made in 2013.
Takefuji sued Merrill Lynch in April 2010 for about $256.6m arguing the brokerage failed to sufficiently explain the risks in the transaction, which was designed to lower the consumer lender’s interest costs. The deal involved Takefuji investing $265.5m in a credit-linked security that was later liquidated as the securities backing it slumped.
Bank of America acquired Merrill Lynch in 2009. Takefuji went bankrupt in September 2010.
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