WestLB AG, the German lender that ceased operations in June, won dismissal of a lawsuit in New York state court seeking $492 million in damages for alleged investment losses, according to court documents.
WestLB, based in Dusseldorf, was sued by Bank Hapoalim BM, Israel’s second-biggest bank by assets, Israel-based Mizrahi Tefahot Bank Ltd., Bahrain-based Arab Banking Corp. and Dublin-based Anglo Irish Bank Corp. in November 2009. The banks alleged they lost their entire investment in two WestLB-managed structured investment vehicles and accused the German lender of claims including fraud and negligence.
New York State Supreme Court Justice Shirley Werner Kornreich said in her dismissal ruling that the plaintiffs are “highly sophisticated business entities” that had access to information that they claim the defendants used to misrepresent the portfolio.
The lawsuit “fails to support any inference that plaintiffs were unaware of the same information or unable to apprise themselves of it,” Kornreich said in her Sept. 24 ruling. “It establishes the opposite.”
WestLB ceased operations on June 29 as part of European Union conditions tied to a 17 billion euro ($21.9 billion) package of aid to bail out the bank following the 2008 financial crisis.
The case is Bank Hapoalim BM v. WestLB AG, 603458/2009, New York State Supreme Court (Manhattan).