Highland Capital Mgmt. L.P. v. UBS Securities,
LLC (In re Lyondell Chemical Co.), 505 B.R. 409 (S.D.N.Y.
2014) –
A hedge fund sued an investment bank for tortious interference
based on its exclusion from participation in exit financing for a
debtor. The bankruptcy court granted the investment banker's
motion to dismiss for failure to state a claim, and the hedge fund
appealed.
The debtor (Lyondell) was described as the world's third
largest chemical company with yearly revenues approaching
$31 billion. To complete its reorganization, the debtor sought
syndication of a $1 billion senior term loan facility as part
of its exit financing.
The engagement letter between Lyondell and an investment bank
(UBS) as one of the Joint Lead Arrangers and Joint Bookrunners
provided that "the Joint Lead Arrangers, in consultation and
cooperation with [Lyondell], will manage all aspects of any
syndication, including decisions as to... which institutions will
participate."
