Dismissal of Woori lawsuit against Merrill upheld by U.S. court

Reuters

By Joseph Ax

NEW YORK, Nov 21 (Reuters) - A U.S. appeals court onThursday upheld the dismissal of a lawsuit brought by SouthKorea's Woori Bank against Bank of America Corp's Merrill Lynch unit over losses from $143 million inmortgage-related investments.

The 2nd U.S. Circuit Court of Appeals in New York saidWoori's 2012 lawsuit was filed after the three-year statute oflimitations under South Korean law had expired.

Woori, which is owned by Woori Finance Holdings Co Ltd, had argued that the three-year clock did not startuntil January 2011, when the U.S. Financial Crisis InquiryCommission published a report outlining the causes of thehousing market meltdown.

But the court said that government investigations intoMerrill Lynch, lawsuits filed against Merrill Lynch over thecollateralized debt obligations in question and "overallpublicity" surrounding the investments were enough to show thatWoori was aware of its potential claims more than three yearsbefore it filed its lawsuit.

A U.S. lawyer for Woori did not immediately return a requestfor comment on Thursday.

The dismissal, initially made by U.S. District Judge VictorMarrero in February, is one of three such defeats in a U.S.court for Woori Bank, which was put under state controlfollowing financial crises.

In March, U.S. District Judge Laura Taylor Swain dismissed aWoori lawsuit against Citigroup Inc, saying Woori hadfailed to show that Citigroup acted fraudulently in selling it$95 million in CDOs. Swain permitted the bank to file an amendedcomplaint, which it did in August.

And in December, another Manhattan federal judge dismissedWoori's lawsuit against Royal Bank of Scotland Group Plc over losses on $80 million of debt securities. Woori hasappealed that decision to the 2nd Circuit.

The case is Woori Bank v. Merrill Lynch et al., 2nd U.S.Circuit Court of Appeals, No. 13-829.

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