Seward & Kissel Litigators Win Major Jury Verdict In High Yield Note Dispute

June 30, 2008

Following a three week jury trial in federal court in Manhattan, RBC Capital Markets Corporation (“RBC”), a client of the Firm, and its customer, Highland Capital Management, L.P. (“Highland”), were victorious in a significant breach of contract case involving the sale of high yield notes. The jury awarded in excess of $40 Million in total to RBC and Highland and also found that pre-judgment interest should be awarded as of June 19, 2001. With pre-judgment interest, the judgment subsequently entered for the two parties was in excess of $64.4 Million.

The dispute involved subordinated promissory notes that had been issued to the defendants in connection with the sale of their family business. RBC and Highland alleged that a securities broker representing the defendants orally agreed to sell the notes to RBC for 51% of face value in March 2001 and that the defendants had reneged on the trade because they were in possession of material non-public information about the possible sale of the company that issued the high yield notes. The defendants denied that there had ever been any agreement to sell the notes. The jury agreed with RBC and Highland in finding that there had been an oral agreement and that the defendants were liable.

The RBC trial team was led by Seward & Kissel litigation partners Michael J. McNamara and Jack Yoskowitz and included associates Ross Hooper, Kimberly White and Mandy DeRoche. Highland was represented at trial by partners Paul B. Lackey and Jamie Welton and associate Kristen Miller Reinsch of Lackey Hershman, LLP in Dallas, Texas. The defendants were represented by Alvin M. Stein and Katherine Ash of Troutman Sanders LLP