In an opinion issued today, Simpson Thacher received full relief for a Bank of America affiliate on its claim for approximately $146 million for breach of contract. The case involved a currency and interest rate derivatives transaction between the firm’s client, Merrill Lynch Capital Services (“MLCS”), and UISA Finance, the financing company of Usinas Itamarati (“Itamarati”), a Brazilian company engaged in the production of sugarcane, soy, and related products.
After Itamarati and UISA Finance defaulted on their obligations under the derivatives transaction in the fall of 2008, MLCS initiated the action to recover the nearly $150 million due and owing under the parties’ derivatives agreement. In June 2010, following a series of motions, the Court dismissed defendants misrepresentation and breach of fiduciary duty counterclaims, and granted summary judgment against UISA Finance. The decision left open for trial the enforceability of Itamarati’s guaranty of UISA Finance’s obligations, which Itamarati claimed was not authorized, and MLCS’s claim for damages. The Court conducted a bench trial from June 21 through June 27, 2011, and, for the reasons stated in his opinion, dated April 10, 2012, Judge Sullivan found Itamarati’s guaranty to be actually and apparently authorized, and rendered a verdict in favor of MLCS against both defendants for the entire amount of MLCS’s claim, plus interest and expenses including attorneys fees.
The Simpson Thacher attorneys who tried this case were Thomas C. Rice and William T. Russell, Jr., supported by associates Paul J. Sirkis, Elizabeth Gudis and Kelly Hodges.
Itamarati and UISA Finance were represented by Richard Werder, Brian Timmons and Adam Cashman of Quinn Emanuel Urquhart & Sullivan, LLP.