July 20 (Bloomberg) -- UISA Finance and Usinas Itamarati SA appealed a $146 million federal court judgment won in April by Bank of America Corp.’s Merrill Lynch unit.
U.S. District Judge Richard Sullivan assessed the damages in April in a breach-of-contract suit against UISA Finance and Usinas Itamarati involving a derivatives transaction in 2008. Sullivan conducted a five-day trial without a jury in June 2011. UISA Finance and Usinas Itamarati filed the appeal today in federal court in Manhattan.
UISA Finance is the financial arm of Usinas Itamarati, a Brazil-based manufacturer of sugar and ethanol. UISA and Usinas are owned by Companhia Itamarati de Investimentos.
Merrill Lynch sued in 2009 seeking $146 million in damages. UISA borrowed $125 million from Merrill in 2007, according to court filings. After the loan, UISA made an agreement with the bank for an interest-rate swap in order to reduce its interest payments.
When the financial crisis deepened in late 2008, UISA was unable to provide acceptable collateral to Merrill and the swap was terminated, according to the judgment. At that time UISA and Itamarati, the guarantor of the agreement, owed $146 million.
The case is Merrill Lynch Capital Services v. UISA Finance, 09-02324, U.S. District Court, Southern District of New York (Manhattan).
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