The New York supreme court of appeals has found Barclays liable for breach of a $1.5bn derivatives contract signed with hedge fund Black Diamond Capital.
The ruling is likely to cost the bank $700m in the form of the withheld collateral of $300m and the remaining in interest and legal costs, reports the Financial Times.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Black Diamond has claimed that the terms of the contract allow it to claim default interest at an annual rate of 15.6%.
The Connecticut-based hedge fund filed a suit on Barclays in October 2008 after the latter paid only $5m as against $40m collateral call under the terms of the contract.
The supreme court has overturned a previous ruling that was in the favour of Barclays.
FT has quoted the bank as saying, "We are disappointed with and disagree with the court’s decision. We are evaluating our options with respect to an appeal."
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
