German Bank Says UBS CDO Was Designed To Fail

Law360, New York (March 10, 2011, 8:17 PM EST) -- A German bank allegedly lost nearly $500 million because of UBS AG's scheme to stuff a collateralized debt obligation with low-quality debt so it could collect on swap agreements, an attorney for the bank told a New York appeals court Thursday.

UBS touted the credit default swap protections it arranged for the securities, much as a landlord might buy fire insurance on a building, HSH Nordbank AG attorney, Philippe Z. Selendy of Quinn Emanuel Urquhart & Sullivan LLP, told a five-judge panel of the Supreme Court...
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