Unilever Superannuation Fund, London, trustees are suing Mercury Asset Management for alleged negligence and are seeking damages of at least £100 million ($165.59 million). The claim was filed this morning in High Court of Justice, London, on behalf of the trustees of the £4 billion fund. In a statement, the trustees allege Mercury was in breach of contract when it "negligently failed to take sufficient account of the risk of underperformance while managing a £1 billion balanced U.K. and international equity and bond portfolio for the fund. The charge relates to a period between January 1997 and March 1998 when, during the first four quarters, Mercurys overall portfolio underperformed the agreed benchmark by 8%. By March 1998, when USF trustees terminated the contract with Mercury, the underperformance over the five quarters had increased to 10.5%. Mercury had been managing assets for USF since 1987 and was re-appointed in January 1997 under new contractual terms stating the agreed downside tolerance was no more than 3% below the benchmark for any four successive calendar quarters. "The advice that the USF trustees has been given is that the U.K. equity portfolio selected by MAM (Mercury) was far too risky for the agreed investment mandate. In the absence of a satisfactory settlement it was clear that the trustees had a fiduciary duty to take proceedings in the interest of the funds members, said Richard Greenhalgh, chairman of the board of trustees of the USF fund. In a statement Mercury said it would contest the claim vigorously. "USF has chosen to concentrate on only a comparatively short period of underperformance and has wholly ignored Mercurys previous nine-year out-performance record. Even accounting for the downturn in Mercurys performance in 1997, Mercurys long-term record for USF remains close to the benchmark and is markedly better than the long-term record of many of USFs other previous managers, the statement said.