BofA’s Merrill Said to Appeal $136 Million Tokyo Verdict

By Takahiko Hyuga  

Bank of America Corp.’s Merrill Lynch units appealed to Japan’s highest court against a ruling that they pay 14.5 billion yen ($136 million) for their role in a bond transaction with failed consumer lender Takefuji Corp., a person with knowledge of the matter said.
Merrill Lynch International and Merrill Lynch Japan Securities Co. made the appeal to the Supreme Court of Japan after they were ordered last month to pay the compensation, the person said, asking not to be named because the filing isn’t public. The Tokyo High Court’s Aug. 27 ruling against Merrill Lynch overturned a district court judgment made last year.
Takefuji sued Merrill Lynch in April 2010 for about 29 billion yen, arguing the brokerage failed to sufficiently explain the risks in the transaction designed to
lower the consumer lender’s interest costs. The deal involved Takefuji investing 30 billion yen in a credit-linked security that was later liquidated as the securities backing it slumped.
Charlotte, North Carolina-based Bank of America acquired Merrill Lynch in 2009. Takefuji went bankrupt in September 2010.