Jan 26 (Reuters) - A Dallas-based investment company
has launched a $95 million lawsuit against Orrick, Herrington & Sutcliffe, claiming that the law firm's negligence led to losses
from a collapsed loan deal in 2008 with the Royal Bank of Scotland.
Highland Financial Partners and its affiliates filed suit on
Wednesday in the District Court of Dallas County, alleging that
Orrick failed to tell it about a provision in a loan
agreement with the Royal Bank of Scotland. That
provision enabled the bank to cancel the contract at
will and ended up costing Highland nearly $100 million in
damages, the lawsuit asserts.
Specifically, the lawsuit alleges that Orrick failed to tell
Highland that amendments to a pending $500 million loan
deal with Royal Bank, which extended the deadline to close
the contract, did not eliminate a provision that allowed the
bank to terminate the pact. Highland asserts that had it known
that the bank could end the deal at will, it would not have paid
$65 million to extend the terms. Highland seeks that amount from
Orrick, plus damages to cover the cost of a $30-million judgment
that the Royal Bank won against Highland in connection with the
deal.
Representing Orrick is Rod Phelan, a partner with Baker
Botts in Dallas. "Orrick's lawyers did their jobs, and we will
defend this case vigorously," Phelan said in an email. He
referred to a 2010 U.K. appeals court decision that affirmed a
lower court ruling that granted summary judgment to the Royal
Bank. The bank was defending claims brought by Highland
challenging the contract at issue.
"Orrick was not Highland's first target," Phelan said. "Now
that the London court has sided with the Royal Bank of Scotland,
Highland is looking for someone else to blame."
William Reid, with Reid Collins & Tsai in Austin, is
representing Highland. He did not respond to a request for
comment.
The case is Highland CDO v. Orrick, Herrington & Sutcliffe,
No. DC-12-00891, Dallas County District Court.
For the plaintiff: William Reid, Reid Collins & Tsai,
Austin.
For the defense: Rod Phelan, Baker Botts, Dallas.
(Reporting by Leigh Jones)
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