UBS sued Highland Capital Management, claiming losses of at least $686 million over a failed collateralized debt obligation transaction.
Highland Capital and two affiliates “fraudulently induced” UBS to restructure the CDO in 2008, the bank alleged in papers filed in New York State Supreme Court in New York.
The new lawsuit follows a complaint filed by UBS on Feb. 24, 2009. Highland Capital in February won dismissal of one of three claims in the 2009 lawsuit. UBS separately filed an amended complaint in that case on Monday, court records show.
An appeals court in New York reversed an October ruling by New York State Supreme Court Justice Bernard Fried, who had refused to dismiss a claim that Highland Capital had a duty to indemnify UBS for losses incurred when the transaction failed to occur before the agreements terminated.
“We are disappointed that UBS has chosen to refile its baseless lawsuit against Highland Capital and the funds given the court's previous dismissal of the suit's central claim,” Nina Devlin, a spokeswoman for Highland Capital, wrote in an e-mailed statement.