Germany's HSH Nordbank to sue UBS over sub prime losses
27 Feb 2008
Mumbai: State-run German lender HSH Nordbank AG said it would sue Swiss rival UBS in a US court this month for alleged mismanagement of $500 million in investments in US mortgage-related securities.
HSH Nordbank "expects to file its claim against UBS in New York by the end of February", the bank said in a statement. But, the bank said, it was still open to talks.
"UBS' management of the portfolio has been in breach of its contractual obligations and fiduciary duties and substitutions were made solely for the benefit of UBS," HAH said, adding, "we regard the recovery of losses as the responsibility of UBS."
While HSH has not revealed its share of the losses in UBS transactions, UBS has so far revealed losses of over $18 billion in sub-prime mortgage-related investments.
Hamburg-based HSH, is 26 per cent held by funds managed by JC Flowers & Co LLC.
"Our counterparty - HSH Nordbank - is a professional and sophisticated market participant," UBS spokesman Serge Steiner said.
UBS shareholders are scheduled to vote tomorrow on a 13 billion Swiss franc ($11.9 billion) cash injection from the Singapore government's fund and an unnamed Middle East investor to shore up the bank's capital.
